Jevons, Jenkin, and Walras on demand-and-supply analysis in.pdf

Jevons, Jenkin, and Walras on demand-and-supply analysis in the theory of exchange Franco Donzelli Department of Economics, Business and Statistics University of Milano October 1, 2007 Abstract In his economic writings Jevons insists on the allegedly fundamen- tal role played by the so-called laws of supply and demand in his theory of exchange; yet no demand-and-supply analysis is actually employed in deriving such theory, as developed in Chapter 4 of The Theory of Political Economy (TPE). This is all the more puzzling in the light of the following two facts: 1) in his 1868 correspondence with Jevons, Fleeming Jenkin provides a complete geometrical solution of the exchange equilibrium problem based on the use of demand and supply curves, but his suggestion is wholly neglected by Jevons in the Örst edition of TPE (1871); 2) in his 1874 open letter to Jevons, Wal- ras explicitly criticizes his correspondent for his defective treatment of the laws of supply and demand, suggesting an alternative ana- lytical solution of the exchange problem based on the use of demand and supply functions; yet Jevons entirely disregards Walrasís remarks in preparing the second edition of TPE (1879). This paper compares Jevonsís, Jenkinís and Walrasís approaches to the exchange equilib- rium problem, explaining the analytical and epistemological reasons that underlie Jevonsís neglect of his correspondentsícriticism and ad- vice. Keywords: Jevons, Jenkin, Walras, equilibrium, disequilibrium, demand and supply, theory of exchange JEL codes: B13, B16