Perturbation theory in a pure exchange non-equilibrium economy
AbstractWe develop a formalism to study linearized perturbations around the equilibria of a pure exchange economy. With the use of mean field theory techniques, we derive equations for the flow of products in an economy driven by heterogeneous preferences and probabilistic interaction between agents. We are able to show that if the economic agents have static preferences, which are also homogeneous in any of the steady states, the final wealth distribution is independent of the dynamics of the non-equilibrium theory. In particular, it is completely determined in terms of the initial conditions, and it is independent of the probability, and the network of interaction between agents. We show that the main effect of the network is to determine the relaxation time via the usual eigenvalue gap as in random walks on graphs.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14569.
Date of creation: 08 Apr 2009
Date of revision:
non-equilibrium economics; perturbation theory;
Find related papers by JEL classification:
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
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