The Realizability Problem in Economics

This paper formulates the realizability problem in economics as a foundational question that has been systematically under-treated by the standard literature: under what conditions are the equilibria, allocations, and dynamic paths that economic models describe as feasible actually realizable by the economic systems being modeled?

The paper distinguishes three levels of analysis:

• Mathematical solvability — whether a model admits a solution under its formal assumptions;
• Theoretical feasibility — whether the solution is consistent with the structural constraints (resources, technology, preferences) that the model recognizes;
• Practical realizability — whether the solution can be brought into being by agents and institutions operating under finite coordination capacity and binding temporal constraints.

Standard economic analysis has tended to collapse the third level into the second, treating realizability as a matter of incentive compatibility or information structure alone. This paper argues that such collapses obscure a distinct and consequential class of failures — cases in which a result is mathematically valid and theoretically feasible, yet structurally impossible for the system to realize within the time it has available.

The argument has direct implications for the evaluation of policy proposals, the design of institutions, and the longer-term reform of macroeconomic and growth theory. The paper situates the realizability problem within the broader research program of temporal economics, of which it is a central pillar.

Read the full paper on SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6744418

【中文简介】

本文将”可实现性问题”确立为经济学中一个被系统性忽视的基础性问题：经济模型所描述的均衡、配置与动态路径，在现实经济系统中究竟能否真正实现？

本文区分三个层次：数学可解性、理论可行性、实践可实现性。标准经济分析长期将第三个层次折叠进第二个层次——将可实现性等同于激励相容或信息结构问题。本文指出，这种折叠掩盖了一类独特的失败：某个结果在数学上成立、理论上可行，却在系统可用的时间内结构性地无法实现。

完整版（英文）请见 SSRN： https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6744418

Recommended citation: Fei, Chunlu. (2026). "The Realizability Problem in Economics." SSRN Working Paper. https://doi.org/10.2139/ssrn.6744418
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