> I think the biggest error in 20 century economics has been to think that the general equillibrium model has any relevane to the real world.
We can agree on this part, and I'll further add that it's also a tremendous error to ignore that the equillibrium is dynamic and to ignore or downplay what happens in the intermediate periods during which the system is in disequillibrium.
The study of disequillibrium is the only thing importend in the real world.
To explain how the market reaches equillibrium (mostly only in theory) or how it at least sometimes moves towards equillibrium (mostly in the real world) is what economic analysis must provide. Just like Darwin explained what make evolution work.
The Theory behind this is called Market Process Theory, it is mostly created by people from the Austrian School of Economics but also from a lot of swedish economist.
We can agree on this part, and I'll further add that it's also a tremendous error to ignore that the equillibrium is dynamic and to ignore or downplay what happens in the intermediate periods during which the system is in disequillibrium.