The equilibrium manifold with boundary constraints on the consumption sets
AbstractIn this paper we consider a class of pure exchange economies in which the consumption plans may be restricted to be above a minimal level. This class is parameterised by the initial endowments and the constraints on the consumption. We show that the demand functions are locally Lipschitzian and almost everywhere continously differentiable even if some constraints may be binding. We then study the equilibrium manifold that is the graph of the correspondence which associates the equilibrium price vectors to the parameters. Using an adapted definition of regularity, we show that: the set of regular economies is open and of full measure; for each regular economy, there exists a finite odd number of equilibria and for each equilibrium price, there exists a local differentiable selection of the equilibrium manifold which selects the given price vector. In the last section, we show that the above results hold true when the constraints are fixed.
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Bibliographic InfoArticle provided by University of Chile, Department of Economics in its journal Estudios de Economia.
Volume (Year): 30 (2003)
Issue (Month): 2 Year 2003 (December)
Demand function; general equilibrium; regular economies.;
Other versions of this item:
- Jean-Marc Bonnisseau & Jorge Rivera Cayupi, 2002. "The equilibrium manifold with Boundary constraints on the Consumption sets," Working Papers wp196, University of Chile, Department of Economics.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
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