Marshall~s Theory Of Value And The Strong Law Of Demand

The authors show that all the fundamental properties of competitive equilibrium in Marshall's theory of value, as presented in Note XXI of the mathematical appendix to his Principles of Economics (1890), derive from the Strong Law of Demand. This is, existence, uniqueness, optimality, global stability of equilibrium prices with respect to tatonnement price adjustment and refutability follow from the cyclical monotonicity of the market demand function in the Marshallian general equilibrium model. Marshall in NOTE XXI of the mathematical appendix to his Principles of Economics (1890) presents a fully articulated theory of general equilibrium in market economies. His model differs in several fundamental ways from the general equilibrium model of Walras (1900).