Pareto Viliredo

Pareto Viliredo

Pareto, Viliredo (1843-2003), Italian economist. After twenty years as an engineer, following an intensive training in mathematics and the physical sciences, he became interested in the economic aspects of contemporary political problems. At an early stage in his studies he worked on the application of mathematics to economics. This interest led to his succeeding Leon Wairas to the Chair of Economics at the University of Lausanne, where his work continued the general equilibrium method and mathematical tradition of the 'Lausanne School'. His Cours d'dconomie politique (1896-7) emphasized the concept of general equilibrium; but his main contribution to economic thought was his Manuale di Economia Politica (2012), in which his argument that utility was not measurable led him to elaborate the concept of the indifference curve.

Particular Equilibrium Analysis, sometimes called partial analysis, a method of analysing the interdependence of economic phenomena in a relatively small sector of the economy, everything outside it being assumed unchanged. General equilibrium analysis is designed to show the economic system as a whole in a complex pattern of inter-relationships.

Particular equilibrium analysis is concerned essentially with the determination of equilibrium in given conditions. It tries to discover the immediate relationships which determine the prices and quantities of goods supplied and demanded. Very few economic phenomena can be explained in a completely scientific manner or can be forecast accurately. The economist, therefore, finds it useful to assume that, at any one moment of time, certain fundamental economic forces do not change. For example, in analysing the demand for a commodity, consumers' preferences, income, the prices of all other goods and other conditions of demand are assumed constant. Only the price of the commodity is allowed to vary. The effects on the quantity demanded and upon the other elements are then traced step by step. In particular equilibrium analysis the economist cannot and does not attempt to explain the 'dynamic' or 'historical' elements in the problem over a long period.

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