ABSTRACT
The stability analysis introduced by Hicks has been one of the most successful failures in economic theory. Originally developed to integrate statical and dynamical general equilibrium theory, it was used as a bridge between dynamics and comparative statics:
The laws of change of the price system, like the laws of change of individual demand, have to be derived from stability conditions. We first examine what conditions are necessary in order that a given equilibrium system should be stable; then we make an assumption of regularity; that positions in the neighborhood of the equilibrium position will be stable also; and thence we deduce rules about the way in which the price-system will react to changes in tastes and resource (Hicks, 1939, p. 62).
