On Oskar Lange’s Theoretical Positions on Equilibrium and Capital in Some 1930s and 1940s Writings

Abstract

The paper addresses the hypothesis according to which the traditional equilibrium notion as a centre of gravitation, i.e. a position that the economy tends to realize over sufficient time under time-consuming adjustments and that forcibly needs a value specification of capital, still prevailed in neoclassical theory even after John Hick´s 1939 approach became dominant within that theory. This is shown by examining Oskar Lange´s work on equilibrium and capital, which has led us to conclude that despite he adopted the Hicksian approach in his 1944 essay, Lange continued to reason in terms of those traditional conceptions of equilibrium and capital.