General Equilibrium Analysis:
General Equilibrium Analysis was developed by Léon Walras, a French economist, in the late 19th century. It is a theory that examines the interdependence of different markets within an economy.

Key Points:
- Definition: General Equilibrium Analysis is a framework used to analyze how supply and demand in multiple markets interact to determine the prices and quantities of goods and services in an economy.
- Walrasian Equilibrium: In this analysis, the concept of Walrasian equilibrium plays a crucial role. It refers to a state where all markets clear simultaneously, meaning that the quantity demanded equals the quantity supplied in every market.
- Assumptions: The theory of General Equilibrium Analysis is based on several assumptions, including perfect competition, rationality of economic agents, complete information, and the absence of externalities.
- Application: This framework is used to study the efficiency and welfare implications of different economic policies, such as taxes, subsidies, and regulations. It helps economists understand the complex interactions between markets and the potential outcomes of various policy interventions.
- Mathematical Formulation: General Equilibrium Analysis involves complex mathematical models to represent the interactions between supply and demand in different markets. These models are used to predict how changes in one market can affect prices and quantities in other markets.
- Contributions: The development of General Equilibrium Analysis by Walras revolutionized the field of economics by providing a comprehensive framework to analyze the functioning of an entire economy. It laid the foundation for modern economic theory and influenced the work of subsequent economists.
In conclusion, General Equilibrium Analysis, developed by Walras, is a fundamental theory in economics that helps us understand how markets interact and determine prices and quantities in an economy.