Comparative statics

In economics, comparative statics is the comparison of two different economic outcomes, before and after a change in some underlying exogenous parameter.

As a type of static analysis it compares two different 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, and to study changes in monetary or fiscal policy when analyzing the whole economy. The term 'comparative statics' itself is more commonly used in relation to microeconomics (including general equilibrium analysis) than to macroeconomics. Comparative statics was formalized by John R. Hicks (1939) and Paul A. Samuelson (1947) (Kehoe, 1987, p. 517) but was presented graphically from at least the 1870s.

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

Comparative statics results are usually derived by using the implicit function theorem to calculate a linear approximation to the system of equations that defines the equilibrium, under the assumption that the equilibrium is stable. That is, if we consider a sufficiently small change in some exogenous parameter, we can calculate how each endogenous variable changes using only the first derivatives of the terms that appear in the equilibrium equations.

...
Wikipedia