Reconsidering the Equilibrium Concept

Toward a Constructive Framework for the Modern Economy

Abstract

This paper proposes a dynamic equilibrium framework that reinterprets persistent macroeconomic issues—global imbalances, long-run deflation or entrenched inequality—not as market failures, but as structural outcomes. Departing from standard nominal‑adjustment models, it incorporates asset‑side mechanisms and reconsiders the transversality condition (TVC), deriving:R_t-ρ=n+D_a-U_(θa)θ/U_c; This balance means the divergence between asset returns (R_t) and time preference (ρ) is sustained by the balance of capital diffusion (D_a), population growth (n) and preference terms (U_(θa)θ/U_c). As result, equilibrium arises from structural and institutional interplay beyond a price‑clearing mechanism. The framework redefines the TVC as a structural condition on asset dissipation and valuation, explaining steady states with persistent differences in asset levels, allocation, or income distribution. By reframing disequilibrium as endogenous optimization outcomes, it offers a basis for analyzing macroeconomic dynamics and designing pragmatic policy tools—for example, Structural Selection of the Steady State, Policy Control of Capital Flows, Asset Dynamics–Based Policy Reconstruction and so on—. In this way, economics may better reflect the realities of economic societies and confront structural challenges.