ABSTRACT
In the disequilibrium method coupled with the fixprice assumption, it is thus presumed that a deficiency or excess in demand will be met with changes in stocks ( cp. Note 8).
The second version of temporary equilibrium is the one used by Lindahl himself in The Rate of Interest. In this case the equilibrium is characterized by an interdependence between prices and the demand and supply functions, in the sense
that in the actual position demand and supply have been brought into equality via price changes, but there are also "income and cost relations (on which the curves are based) that agree with the current price" (Lindahl 19398, p.66). Lindahl describes this method as a Walrasian equilibrium for only one period (cp. ibid.). Even if this method has "a narrower range of application to real conditions" (ibid., p.69) than the first version of temporary equilibrium, and consequently even more so in relation to the disequilibrium method, it still has one particular advantage:
13 Hicks stresses the same point in his defence of temporary equilibrium (cp. Hicks 1946, p.l27).
