However, there was awareness by Walras that equilibrium might not be reached in the real world only on the basis of the fact that equations were mathematically solvable. Therefore, the second step took by Walras was simulating the process of artificial market that would be getting them equilibrium system, a process known as “tâtonnement”.
The process of trial and error marked the process of Tâtonnement, where there was call out for the price and people belonging to the market, which has decided how much they have the will supply and demand that price. If there was demand or supply’s excess, then there can be lowering of the price so that it would be demanded more and supplied less. Thus, the question remains whether the price would be groping towards equilibrium. With groping towards the prices continually in relation to the keeping constant equilibrium, there was assumption by Walras that there would be no making of actual changes until the reaching of the equilibrium taking place. This has been considered highly unrealistic. For instance, if people want buying ketchup in a greater quantity than sellers are willing to sell, then people would not buy anything (Morishima 1983). There is limiting effect of the assumption in relation to the usefulness of the simulated process of Walras as a way to understand the how that the working of the real market takes place.
For example, it is assumed that all productions take place in the business sector, all factors of productions are owned by households, all factors and fully employed and all incomes are spent.
As there is no uniqueness in the equilibrium, and the question remains whether there is any uniqueness in the local settings in any particular equilibrium. If this is the case, then there can be comparative statics as long as there is seize to be any large shocks to the system. There will finite regular economy equilibrium. This makes it unique locally.
The general equilibrium model, which is typically the prevailing of the prices, takes place when the dust settles. These are the ones that have been coordinating with the various consumers’ demands for a number of goods. However, the question remains with regards to the way allocations and the prices are arrived at and whether any shock has been given to the economy causing the outcome that is same to which has been prevailing prior to the shock.
This is equilibrium’s stability and it has relationship with the uniqueness. Amongst the many equilibrium, there will be some that are unstable. And there will be shock in case of unstable equilibriums. With the termination of the process of convergence, there will be winding up of the economy with different set of prices and allocations. The dependence of the stability is not just on the equilibrium numbers, but also on the process types that are guiding the change of price.