Lionel W. McKenzie and the Proof of the Existence of a Competitive Equilibrium

Author: 
E. Roy Weintraub
Publication Number: 
2011-03

 

The theorem proving the existence of general equilibrium in a competitive economy, 

which necessarily involved specifying the conditions under which such an equilibrium would 

exist, is an extraordinary achievement of twentieth-century economics. The discovery is 

commonly attributed to the paper by Kenneth Arrow and Gerard Debreu, "Existence of an 

Equilibrium for a Competitive Economy," which was published in the July 1954 issue of 

Econometrica.  However it is less well-known, even within the economics profession, that Lionel 

McKenzie published a paper in the previous issue of Econometrica, "On Equilibrium in 

Graham's Model of World Trade and Other Competitive Systems,” which discussed many of the 

same themes.  Over the past decade the new availability of archival material, the papers of Lionel 

McKenzie, Robert Solow, Gerard Debreu, and Leonid Hurwicz, permits a reexamination of the 

events surrounding the publication of both Econometrica papers in 1954. The discussion raises 

general issues concerning “simultaneous discovery,” “priority,” and “credit” in economic 

research, and opens a window into some academic practices of that time.