general equilibrium

Definition

Equality of supply and demand in all markets of an economy simultaneously. The number of markets does not have to be large. The simplest Ricardian model has markets only for two goods and one factor, labor, but this is a general equilibrium model. Contrasts with partial equilibrium.

Use general equilibrium in a sentence

Related Terms

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
optimum welfare economics