Comparative macro statics

 

In real world, the economy is changeable. With the pace of time, macroeconomics variables change and that affect to the static equilibrium. Comparative macrostatics explain movable equilibrium. It makes the comparative study of different equilibriums attained by the economy in the economic activities. It deals with the old and new equilibrium. Like comparative microstatics analysis, this analysis focuses on the equilibrium level at different levels. As mentioned above, with the pace of time, initial equilibrium level is affected because of change indifferent variables and new equilibrium will be obtained. But comparative macrostatics does not observe the path from one equilibrium level to another but simply compare the two- new and old equilibrium.

German economist F. Oppenheimer was the person who first used the comparative macrostatics to show the method of economic analysis in 1916. Schumpeter described it as, “An evolutionary process by a succession of static model.” In the words of Schumpeter, “Whenever we deal with disturbance of a given state by trying to indicate the static relations obtaining before a given disturbance impinged upon the system and after it had had time to work itself out.”

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