PROVISIONAL MARKET EQUILIBRIUM

The deficits and surpluses are eliminated in provisional market equilibrium. A deficit of any commodity is inevitably a surplus of the commodity exchangeable for it, because only due to the demand, created by the last, the first is not sufficient. And the same is true other way around for a surplus. To get rid of the occasionally accumulated surpluses and deficits, the market deviates from the measure of intrinsic value and creates a provisional market value. The market equilibrium as such is just a centre of gravity for never ending process of market adjustments, so it is noting fixed in place but instead an ever moving focus of balance through price.

Historical Backdrop
• ALFRED MARSHALL Principles of Economics: temporary equilibrium of demand and supply.
• OSKAR LANGE On The Economic Theory of Socialism: trial and error method.
• JAN TINBERGEN An Econometric Approach to Business Cycle Problems: cobweb theorem.

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