Editing Comparative statics (section)

{{Short description|Thought experiments}}
[[Image:Supply-and-demand.svg|thumb|right|240px|In this graph, comparative statics shows an increase in demand causing a rise in price and quantity. Comparing two equilibrium states, comparative statics does not describe ''how the increases actually occur''.]]

In [[economics]], '''comparative statics''' is the comparison of two different economic outcomes, before and after a change in some underlying [[exogenous variable|exogenous]] [[parameter]].<ref>(Mas-Colell, Whinston, and Green, 1995, p. 24; Silberberg and Suen, 2000)</ref>

As a type of ''[[static analysis]]'' it compares two different [[economic equilibrium|equilibrium]] states, after the process of adjustment (if any).  It does not study the motion towards equilibrium, nor the process of the change itself.

Comparative statics is commonly used to study changes in [[supply and demand]] when analyzing a single [[Market (economics)|market]], and to study changes in [[monetary policy|monetary]] or [[fiscal policy]] when analyzing the whole [[macroeconomics|economy]].  Comparative statics is a tool of analysis in [[microeconomics]] (including [[general equilibrium]] analysis) and [[macroeconomics]]. Comparative statics was formalized by [[Sir John Richard Hicks|John R. Hicks]] (1939) and [[Paul A. Samuelson]] (1947) (Kehoe, 1987, p.&nbsp;517) but was presented graphically from at least the 1870s.<ref>[[Fleeming Jenkin]] (1870), "The Graphical Representation of the Laws of Supply and Demand, and their Application to Labour," in Alexander Grant, ''Recess Studies'' and (1872), "On the principles which regulate the incidence of taxes," ''Proceedings of the Royal Society of Edinburgh 1871-2'', pp. [https://books.google.com/books?id=AGxUAAAAIAAJ&dq=%22On+the+Principles+which+Regulate+the+Incidence+of+Taxes%22&pg=PA618 618-30.], also in ''Papers, Literary, Scientific, &c'', v. 2 (1887), ed. S.C. Colvin and J.A. Ewing via scroll to chapter [https://books.google.com/books?id=fwVDAAAAIAAJ links.]</ref>

For models of stable equilibrium rates of change, such as the [[neoclassical growth model]], [[comparative dynamics]] is the counterpart of comparative statics (Eatwell, 1987).