Integration of the Walrasian Paradigm into the Statistical Paradigm

Walrasian and statistical equilibrium have distinct methodologies and the relation between the two equilibrium concepts has been unknown. We reformulate the concept of statistical equilibrium and prove its existence under much less restrictive assumptions than in the previous literature. As a corollary, we show that Walrasian equilibrium can be interpreted as a special case of statistical equilibrium, so the latter is “general general equilibrium.” Considering the pervasive use of Walrasian equilibria in economic analysis, statistical equilibrium theory can explain even richer economic phenomena, in particular horizontal inequality such as the income distribution.