Abstract:
This paper is a critical examination of the notion of equilibrium in the classical theory of value. It
highlights the theoretical importance as well as the problems associated with the notion of equilibrium
in the classical theory and goes on to argue that Sraffa presents a theory of value within the classical
tradition that does not require a notion of equilibrium of demand and supply, which succeeds in
dissolving the problems associated with the classical theory of value. It also discusses the importance of
the notion of equilibrium in the modern general equilibrium theory for the sake of continuity and
completeness of the story.
