Updating an old question: Prices and quantities

The paper discusses the age-old, and yet unresolved, question of the sense in which the crucial economic variables-prices and quantities-can be considered as appropriate and compatible with each other in a position of economic equilibrium. The author compares, on this ground, two approaches, respectively epitomized by the solutions offered by Walras and by Sraffa; and shows that neither one can be regarded as fully satisfactory. A possible step forward-he maintains-implies the analysis of the uncomfortable question of the convergence towards a position of equilibrium. After having emphasized that this latter question can be posed in a plausible way only in the context of a “logical”-as opposed to “chronological”-conception of the adjustment process, the author illustrates the encouraging results emerging from a preliminary attempt in this direction carried out in a model which presents classical and Keynesian features. President of the Atlantic Economic Society 1990–91.