Lindahl and Equilibrium
42 Pages Posted: 19 May 2013 Last revised: 6 Sep 2013
Date Written: August 30, 2013
This paper demonstrates that there is a discrepancy between the ideas expressed in Lindahl (1919) and the current-day definition of Lindahl equilibrium. It describes how the ideas expressed by Lindahl (1919) developed into the equilibrium concept for public good economies that now carries Lindahl's name. The paper also touches on a seemingly forgotten equilibrium concept for public good economies known as ratio equilibrium, and explains that from an axiomatic perspective this equilibrium concept is a better fit with the ideas expressed in Lindahl (1919).
Keywords: Public Good Economies, Lindahl Equilibrium, Ratio Equilibrium, Axiomatization
JEL Classification: H41, B16, C79
Suggested Citation: Suggested Citation