Catastrophe theory and postmodern general equilibrium: some critical observations

Abstract

Postmodern general equilibrium theory is the formulation of the Walrasian model in the context of the mathematics of catastrophe theory. In its formulation the model comes equipped with a mapping called the natural projection. The goal of postmodern general equilibrium theory is to extract economic properties from this mapping. However, we show that the natural projection itself is void of any economic content. This observation alone calls for a reexamination of the assumptions and properties of the postmodern general equilibrium model.