Development and Underdevelopment in the History of Economic Thought

On continuity and general equilibrium: Pareto, Cassel and the foundations of neoclassical economics

Arthmar Rogerio Arthmar, Universidade Federal do Espírito Santo
McLure Michael, University of Western Australia

This article explores the application of the principle of continuity to general equilibrium theory by Vilfredo Pareto, Gustav Cassel, and Knut Wicksell. It begins by recapping Pareto’s early works based on cardinal utility and continuity. After that, Cassel’s proposal of an elementary framing for general equilibrium with discontinuous functions is presented. The next section covers some unpublished letters between Pareto, Maffeo Pantaleoni, and Cassel related to the issue. It is followed by a review of the reception of Cassel’s ideas advanced in his 1899 Grundriss. In the end, some reflections are offered on the scientific implications of the principle of continuity to neoclassical economics.

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Keywords: continuity, pure theory, general equilibrium,utility, scarcity,

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