ABSTRACT
Microeconomics provides a powerful set of theories about the choices of individual agents and the behavior of particular markets. Modern economic theory is overwhelmingly a theory of equilibrium. It analyzes positions from which there is no incentive to depart, positions at which the plans and expectations of economic agents are mutually compatible. The fact that positions of general equilibria exist under a wide set of conditions means that there is not a lacuna at the center of microeconomic analysis, forcing us to reformulate the theories of the household, the firm, and the competitive market. Agents have been supposed to make their plans as though disequilibrium did not exist, and the interaction of those plans has been modeled only as an afterthought at best. Disequilibrium never enters the dreams of those agents; they construct their excess demands as though prices are fixed and unchanging and as though their desired transactions will in fact take place.
