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Equilbrium vs the ERE

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DMXRoid posted on Thu, Mar 29 2012 2:17 PM

Is there a functional difference between what Mises and Rothbard call the ERE and what other economists refer to as the equilbrium state for an economy, or are they synonyms? 

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xahrx replied on Thu, Mar 29 2012 2:40 PM

Equillibrium is a static condition, any model solved to its market clearing price basically, without thought for what follows.  The Evenly Rotating Economy is a thought model where uncertainty doesn't exist that allows you to intellectually differentiate between a capital return and profit for one example.  I believe there are other consequences to the lack of uncertainty as well, like no money, and demonstrating interest as pure time preference.  Everything is invested to come due when needed for immediate barter.  But the real difference is it's a dynamic thought model where there is no 'end' to the movement in the economy it postulates.

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