The Rationale of General Equilibrium Theory

This paper is concerned with the methodological issues raised by the attempt to use or apply the results of general equilibrium theory. This concern arises out of a critical discussion of Professor F. H. Hahn's view that general equilibrium theory is far from being a self-contained exercise, and is all the more decisive in its application for being carried out at such a high level of abstraction. It is argued that Hahn's rationale for general equilibrium theorising is unsatisfactory, and alternative lines are suggested along which such a rationale could be constructed.