The Lausanne School of

economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics anal ...

, sometimes referred to as the Mathematical School, refers to the

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...

school of thought surrounding

Léon Walras Marie-Esprit-Léon Walras (; 16 December 1834 – 5 January 1910) was a French mathematical economist and Georgist. He formulated the marginal theory of value (independently of William Stanley Jevons and Carl Menger) and pioneered the developme ...

and

Vilfredo Pareto Vilfredo Federico Damaso Pareto ( , , , ; born Wilfried Fritz Pareto; 15 July 1848 – 19 August 1923) was an Italians, Italian polymath (civil engineer, sociologist, economist, political scientist, and philosopher). He made several important ...

. It is named after the

University of Lausanne The University of Lausanne (UNIL; french: links=no, Université de Lausanne) in Lausanne, Switzerland was founded in 1537 as a school of Protestant theology, before being made a university in 1890. The university is the second oldest in Switzer ...

, at which both Walras and Pareto held professorships. Polish economist Leon Winiarski is also said to have been a member of the Lausanne School.

Background

The term Lausanne School was first coined by the mathematician Hermann Laurent in his article ''Petit traite d'economie politique mathematique'' (''Small Treatise on Mathematical Political Economy''). The central feature of the Lausanne School was its development of

general equilibrium theory In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ov ...

. Laurent's article presented a simplified version of this theory. Lausanne School is also associated with the Italian School and the Paretian School, which were based on the works of Pareto. Italian economic historians have adopted Luigi Einaudi's description that the age of the Lausanne School in Italy should be called "Italian school". The school is distinguished from the work of

Alfred Marshall Alfred Marshall (26 July 1842 – 13 July 1924) was an English economist, and was one of the most influential economists of his time. His book '' Principles of Economics'' (1890) was the dominant economic textbook in England for many years. I ...

by the way it maintains the necessity of considering the interaction of all parts of the economy simultaneously so that the behavior that occurs within any part of it can be understood. Marshall, on the other hand, preferred to solve economic problems using mathematics as the instrument, with the theorist drawing out conclusions instead of coming up with solutions through the process of verbal reasoning. The Lausanne School attempted to answer the question of whether the welfare of an economy can be measured. Its theorists such as Walras proposed that it can be done through a notion of justice in exchange called "commutative justice", which required all traders to face the same price, which did not change, for a given product. This free competition is said to produce "maximum welfare", allowing for an effective evaluation of questions of welfare. Hans Mayer argued against Lausanne School, citing that its assumptions are unrealistic and that the utility of a good cannot be measured, infinitely divided, nor indefinitely substituted. Members of the Lausanne School include Basile Samsonoff, Marie Kolabinska, and Pierre Boven, who were all students of Pareto.

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Schools of economic thought {{econ-hist-stub

Background

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