Out of Equilibrium

This review article takes the volume by Mario Amendola and Jean-Luc Gaffard Out of Equilibrium as the starting point of a general assessment of the scope and perspectives of out-of-equilibrium economics. After describing the particular subject-matter covered by Amendola and Gaffard, the author calls attention upon he fundamental role in their treatment of time, coordination, and the magnitude of responses. The general foundations of the ‘out-of-equilibrium’ approach are then considered. In this connection, the author argues that making use of illustrations (rather than formal proofs) can still show in a conclusive way that widely held beliefs are not valid as general propositions. It is also maintained that, apart from these ‘anti-general’ results, the out-of-equilibrium approach can lead to positive generalizations of considerable power and significance. In conclusion, this essay maintains that coexistence of equilibrium and out-of-equilibrium analysis is possible, and mentions research and policy areas (such as coordination failures and rational regulatory policy) in which equilibrium theory can provide invaluable insights for an out-of-equilibrium investigation © 2000 Elsevier Science B.V. All rights reserved. JEL classification: D50; D90; O41; B40