Material Detail

This video was recorded at YALE - ECON 251 - Financial Theory. Over time, economists' justifications for why free markets are a good thing have changed. In the first few classes, we saw how under some conditions, the competitive allocation maximizes the sum of agents' utilities. When it was found that this property didn't hold generally, the idea of Pareto efficiency was developed. This class reviews two proofs that equilibrium is Pareto efficient, looking at the arguments of economists Edgeworth and Arrow-Debreu. The lecture suggests that if a broadening of the economic model invalidated the sum of utilities justification of free markets, a further broadening might invalidate the Pareto efficiency justification of unregulated markets. Finally, Professor Geanakoplos discusses how Irving Fisher introduced two crucial ingredients of finance--time and assets--into the standard economic equilibrium model.

This will delete the comment from the database. This operation is not reversible. Are you sure you want to do it?

Thank you for reporting a broken "Go to Material" link in MERLOT to help us maintain a collection of valuable learning materials.

If you feel this material is inappropriate for the MERLOT Collection, please click SEND REPORT, and the MERLOT Team will investigate. Thank you!