Abstract
Comparative statics is the method of analysing the impact of a change in the parameters of a model by comparing the equilibrium that results from the change with the original equilibrium. The term ‘statics’ is not usually meant to have descriptive content: although terms like ‘comparative dynamics’ and ‘comparative steady states’ are sometimes used, comparative statics analysis can be performed on dynamic economic models. The restrictive aspects of this analysis are that there is no analysis of the historical forces that have brought about the original equilibrium position and no analysis of the transitional process involved in the adjustment from one equilibrium position to another. The use of comparative statics, of comparing one equilibrium position with another, is as old as economics itself. It was, for example, the method used by Hume (1752) in his analysis of an increase in the stock of gold on prices in an economy. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
Showing the abstract — retrieve the full paper via the Exa API.