Comparative Statics and Welfare Theorems When Goods Are Normal
AbstractWe examine the impact of the normality assumption, together with the weak axiom, in three related areas of general equilibrium theory. Most obviously, these properties have important implications for equilibrium comparative statics, in the context of exchange, production or (incomplete) financial economies. They also shed light on the relationship between comparative statics and the structure of the excess demand function, which could be thought of as an aspect of the correspondence principle (Samuelson (1947)). Lastly, these properties permit the construction of welfare-like theorems which do not rely on the classical assumptions of individual rationality.
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Bibliographic InfoPaper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 2001-W24.
Length: 52 pages
Date of creation: 01 Dec 2001
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Web page: http://www.nuff.ox.ac.uk/economics/
normal goods; weak axiom; comparative statics; correspondence principle; welfare theorem;
Other versions of this item:
- John Quah, 2001. "Comparative Statics and Welfare Theorems When Goods are Normal," Economics Series Working Papers 2001-W24, University of Oxford, Department of Economics.
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- Quah, John K. -H., 2003. "Market demand and comparative statics when goods are normal," Journal of Mathematical Economics, Elsevier, vol. 39(3-4), pages 317-333, June.
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