Abstract
The general equilibrium theory of value, as developed by Walras (1874–77) and his followers, determines the relative prices of goods in terms of non-monetary factors such as technology, preferences, and endowments. Monetary factors are used to determine the nominal price level once relative prices have been determined. Relative prices are determined by the market-clearing conditions for goods whereas the general price level is determined by the market-clearing condition for money.
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Gale, D. (2010). Money and General Equilibrium. In: Durlauf, S.N., Blume, L.E. (eds) Monetary Economics. The New Palgrave Economics Collection. Palgrave Macmillan, London. https://doi.org/10.1057/9780230280854_28
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DOI: https://doi.org/10.1057/9780230280854_28
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