Introduction: Three ways of looking at economic equilibrium

The concept of equilibrium has been central to economic theorising ever since the discipline was established in its modern form. For Adam Smith, one of the founders of classical political economics in the eighteenth century, equilibrium represented the harmonious outcome of the behaviour of selfish individuals achieving co-ordination as if under the influence of an ‘invisible hand’. Smith’s concept of equilibrium resulted from a qualitative analysis of economic affairs heavily influenced by considerations of a political, social, and moral nature.