Comparative statics is the comparison of two different equilibrium states, before and after a change in one of the variables. Being a study of statics it compares two different unchanging points, once they have changed. It does not study the motion towards equilibrium, nor the process of the change itself.
Comparativestatics is the comparison of two different equilibrium states, before and after a change in one of the variables.
The term 'comparativestatics' itself is more commonly used in relation to microeconomics (including general equilibriumanalysis) than to macroeconomics.
For models of stable equilibrium rates of change, such as the neoclassical growth model, 'comparative dynamics' is the counterpart of comparativestatics, but the term has less currency (Eatwell, 1987).
For example, an individual demand curve is derived from a comparativestatics exercise on the consumer's optimization problem (maximization of utility subject to a budget constraint).
To analyze the comparativestatics properties of the model, the numerical value of a single exogenous variable can be changed and the problem resolved.
Comparativestaticsanalysis is completed by simply comparing the initial and new values of the endogenous variable.
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