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Reference.org
Comparative statics
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<p>In <a href="/facts/Economics/HYctA2Dn">economics</a>, comparative statics is the comparison of two different economic outcomes, before and after a change in some underlying <a href="/facts/Exogenous_variable/CTpuBsPM">exogenous</a> <a href="/facts/Parameter/zFvVFMv9">parameter</a>. </p><p>As a type of <i><a href="/facts/Static_analysis/YkJEVPxs">static analysis</a></i> it compares two different <a href="/facts/Economic_equilibrium/lFTmEyUS">equilibrium</a> states, after the process of adjustment (if any). It does not study the motion towards equilibrium, nor the process of the change itself. </p><p>Comparative statics is commonly used to study changes in <a href="/facts/Supply_and_demand/KprL1fvc">supply and demand</a> when analyzing a single <a href="/facts/Market_(economics)/6RfCU3fH">market</a>, and to study changes in <a href="/facts/Monetary_policy/LXehzvG0">monetary</a> or <a href="/facts/Fiscal_policy/ekVzP0xo">fiscal policy</a> when analyzing the whole <a href="/facts/Macroeconomics/4dcQAdCr">economy</a>. Comparative statics is a tool of analysis in <a href="/facts/Microeconomics/mX6Ek69Y">microeconomics</a> (including <a href="/facts/General_equilibrium/WY0zX5UD">general equilibrium</a> analysis) and <a href="/facts/Macroeconomics/4dcQAdCr">macroeconomics</a>. Comparative statics was formalized by <a href="/facts/Sir_John_Richard_Hicks/8AgpsS4F">John R. Hicks</a> (1939) and <a href="/facts/Paul_A._Samuelson/dIU1hb4B">Paul A. Samuelson</a> (1947) (Kehoe, 1987, p. 517) but was presented graphically from at least the 1870s. </p><p>For models of stable equilibrium rates of change, such as the <a href="/facts/Neoclassical_growth_model/3fvml7BH">neoclassical growth model</a>, <a href="/facts/Comparative_dynamics/lFTmEyUS">comparative dynamics</a> is the counterpart of comparative statics (Eatwell, 1987). </p>