This section begins to address the case of exchange of more than two commodities. For stability of an equilibrium in this context, it must be the case, as before, that a drop in the price of X will tend to make the demand for X greater than the supply. Regarding stability, Hicks asks whether such an effect must be assumed to happen when the prices of all other commodities are given, or when these other prices are allowed to adjust so as to preserve equilibrium in the other markets. Hicks argues that the answer is "that it is what happens when all other prices are adjusted that is really most important." He notes that if a small rise in the price of X makes supply greater than demand, not by the working of the X-market alone, but rather through repercussions in the other markets, "the establishment of an equilibrium price system is going to be a more awkward business; but once equilibrium is reached it will still be a stable equilibrium, properly speaking. A movement away from equilibrium will set up forces tending to restore equilibrium."
Hicks proposes to call a system in which all conditions of stability are satisfied perfectly stable. He uses the term imperfectly stable to describe a system in which some conditions of stability are not satisfied, "but in which supply does become greater than demand when price rises if all repercussions are allowed for."
Hicks gives a brief preview of the fact that there are some problems where imperfect stability plays an important role. As he notes, "Some of the most remarkable of them arise in connexion with the famous 'instability of credit.'" He does not go into detail in the present section, but notes that "a pure system of multiple exchange, if it is stable at all, is likely to be perfectly stable." He concludes the section by dismissing wholly unstable systems as "hardly interesting" and calling the derivation of their laws of change "a nonsense problem."
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