Foundations of Economic Analysis

Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 (Enlarged ed., 1983) by Harvard University Press.

The book begins with this statement: Its other stated purpose (p. 3) is to show how operationally meaningful theorems can be described with a small number of analogous methods.

Wells Prize Committee of Harvard University in 1941, it was subtitled "The Observational Significance of Economic Theory" (p. ix).

But the symmetry conditions required for direct maximization of the system, whether a market or even the simplest model of the business cycle, are lacking, in contrast to an economic unit or its corresponding aggregate.

[2] The correspondence principle is that the stability of equilibrium for a system (such as a market or economy) implies meaningful theorems in comparative statics.

Theorems derived in welfare economics, he notes, are deductive implications of assumptions that are not refutable, thus not meaningful in a certain sense.

It also definitively elucidates the notion of Pareto optimality and the "germ of truth in Adam Smith's doctrine of the invisible hand" (Samuelson, 1983, p. xxiv; Fischer, 1987, p. 236[3]).

354–55) outline possible directions analytical methods might take, including for example models that show how: Samuelson closes by expressing hope in the future use of comparative dynamics to: There are two mathematical appendices totalling 83 pages.

The first gathers and develops "very briefly" and "without striving for rigor" results on maximization conditions and quadratic forms used in the book and not conveniently collected elsewhere (p. 389).