Question

What is WALRASIAN ECONOMICS and What is NON - WALRASIAN ECONOMICS ? State in detail the difference between the two?

Answer 1

Two related but distinct approaches, the Walrasian Approach, the different agents take only prices as signals, and decide on their plans on the basis of these. That is, if the signals are appropriate the plans that the different agents make will be mutually compatible(for particular price signal). The properties of such configurations will form a major part of the discussion. Walrasian methods consider only that configuration where plans of agents are compatible and the only transactions that are made are those that match.  it will be clear that the configuration in which all plans are mutually compatible may be difficult to reach and hence raises the question of what
happens when the plans made by agents are not compatible, or, to put it differently, when market is not clear( off equilibrium). One approach to this issue has been to introduce
various quantity constraints, at some given configuration of prices, which the agents are asked to respond to. If these constraints are appropriate, the constrained plans should be mutually compatible. Non Walrasian approaches consider the kinds of rationing quantity constraints that will make the constrained plans mutually compatible. a Non-walrasian approach has to be consideredor another reason. In the Walrasian approach, as pointed out above, all plans made by

agents are found to be compatible. All persons who wish to work, for example, will find
jobs. There is thus no scope to analyze unemployment. To analyze any problem in economics that involves an observed under-utilization of some available resource, it is essential to step outside the Walrasian paradigm. An example of such an approach to unemployment will be discussed below. Another problem to be addressed is the question of how competitive markets reach a
configuration where the plans are mutually compatible. A view is adopted that competitive agents realize that the plans of agents are not compatible only when they try to transact and are unable to do so. Based on this observation, a process is described
whereby a Walrasian configuration may be ultimately achieved