View source for Neoclassical Schools (1871-today)

===The Lausanne School and Léon  Walras===
The ''"[[Lausanne School]]"'' <ref name=LAUSANNEHET/>, also called the ''Mathematical School'' or the ''Italian School'' refers to the  Neoclassical school of thought led by the Frenchman [[Léon Walras]] <ref name= WALRASHET>[http://cepa.newschool.edu/het/profiles/walras.htm Léon Walras (1834-1910)]</ref> (1834-1910) and the Italian [[Vilfredo Pareto]] <ref name=PARETOHET>[http://cepa.newschool.edu/het/profiles/pareto.htm Vilfredo Pareto (1848-1923)]</ref> (1848-1923). It developed the ''general equilibrium theory'', generalizing and extending the applicability of the Neoclassical approach to economics.  

One can distinguish between the early ''"Walrasian"'' and the later ''"Paretian"'' stages of the ''"[[Lausanne School]]"'' <ref name=LAUSANNEHET/>. The core of their theories were identical but their emphasis and mode of analysis were different.

Walras fundamental tool of analysis was a system of simultaneous market demand and supply equations.   He was mainly interested in analyzing grand themes: the existence of an equilibrium solution to a this system, the stability of that equilibrium, the incorporation of capital and growth and the introduction of money.  

Vilfredo Pareto, Enrico Barone and Giovanni Antonelli, his Italian disciples, were particularly interested in the ''"microfoundations"'' of general equilibrium systems, the relationship between decision-making households and firms and the resulting general equilibrium.  Consequently, the research focus of the Lausanne School moved in a different direction.  

As this new direction was announced most prominently in Vilfredo Pareto's ''Cours d'Économie politique'' (1896-7) <ref name=PARETO2>PARETO, Vilfredo. ''Cours d'Economie Politique''. F.Rouge, Lausanne, 1896</ref> and in his ''Manual of Political Economy'' (1906) <ref name=PARETO1>PARETO, Vilfredo. ''Manual of Political Economy''; Translated By Ann S. Schwier; Edited By Ann S. Schwier and Alfred N. Page Pareto; Publisher: Augustus M. Kelley; 1971</ref> this was the "Paretian" phase.   

The Paretians saw the problem as one of ensuring the compatibility of the individual incentives and constraints of consumers and producers in equilibrium. Their tools were the differential calculus and Lagrangian multipliers. Using advanced mathematics, they constructed a rather grand ''"Paretian general equilibrium system"'', a system of equations, where the agent-theoretic microfoundations were starkly brought to the fore.   They replaced all the grand themes of Walras with a single new one of their own: the efficiency and social optimality of equilibrium.  

The Lausanne School evolved over time to a third phase which focused on the overlap of sociology and economics, along the lines of [[François Perroux]] <ref name=PERROUXHET>[http://cepa.newschool.edu/het/profiles/perroux.htm François Perroux]</ref>.