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AbstractBuilt on the fictional concept of equilibrium, mainstream economics provides a method of analysis that, when paired with the calculus, enables relatively easy identification of maximum and minimum values. Lacking empirical evidence of its behavioral assumptions, the profession accepts such familiar claims as consumer maximization of utility and business firm maximization of profit or revenue. In place of the relatively static concept of equilibrium, the Veblen‐Myrdal notion of circular and cumulative causation (CCC) arguably has greater descriptive capability and more penetrating insight for policy recommendations. This article traces the historical origins of both concepts and argues that CCC offers considerable potential for a broad, dynamic, interdisciplinary, more thorough, and more accurate analytical framework. Specific examples of work that has been done along with suggestions for future applications of this concept are given.

Equilibrium models play a central role in modern (micro)economic analysis.
They form the basis of almost all our understanding in economics and are
increasingly being used in other fields of social science. Yet there are
numerous limitations to the equilibrium approach. To name a few: the
treatment of time, i.e., the problem of distinguishing between ?time in
models? and ?models in time?; learning process, i.e., the problem of
knowledge necessary to attain the equilibrium; equilibrium dynamics, i.e.
considering the equilibrium attainment process and not just the equilibrium
state. Many critics already drew attention to the reach and limitations of
the ?engineering approach? in economic science. It seems that the ?voice of
reason? has never been loud enough. This paper presents a review of the
above-mentioned problems.

Two variables are said to be cointegrated when they move closely together over time, after proper scaling. Cointegration was taken to be the statistical expression of the notion of equilibrium in economics. But is it still possible to talk of cointegration when 'disequilibrium' economics prevail? We argue that it is, and that the duality is strongest between cointegration theory and economic theories of non‐clearing markets. By setting up a simple generic non‐parametric model, it is shown that Clower's dual decision hypothesis is a more direct and natural expression of the notion of cointegration than long‐run equilibrium is. With sticky prices, quantities (e.g. consumption and income) move together more closely than they would otherwise. As a by‐product, the model gives rise to (and justifies from an economics standpoint) a recent statistical approach to modelling economic time series. An observational equivalence between two econometric models is also presented.

This note shows that much conventional macro‐economic literature uses two inconsistent definitions of equilibrium in the commodity market. Equilibrium is defined as income equalling expenditure when deriving the IS curve; but when overall equilibrium is treated the requirement for equilibrium is that planned supply equals planned demand. The note shows that these inconsistent definitions lead to a confusing and often erroneous exposition of disequilibrium behaviour.