August 19, 2014

The Law of Supply and Demand: here it is finally {59}

Working paper at SSRN

Abstract  There is no such thing as a law of human or social behavior. The conceptual consequence of this paper is to discard the subjective-behavioral axioms and to take objective-structural axioms as formal foundations. The central piece of economic theory is the interaction of supply and demand which determines prices and quantities. Supply and demand in turn are assumed to be determined by subjective factors. In the structural axiomatic Paradigm, the macroeconomic Law of Supply and Demand follows solely from objective factors. The Law consists of measurable variables and is testable in principle. The results prove the superiority of the new Paradigm.