Intertemporal competitive equilibrium: a reappraisal of a basic source of instability
AbstractThis paper resumes a source of instability of intertemporal equilibrium which was anticipated by Garegnani (2003) and criticized by Schefold (2004). The author points out that a non orthodox tÃ¢tonnement pricing must be accepted if the theory has to be consistent with the Jevonsâ€™s law of unique price. Such tÃ¢tonnement prescribes that the rule for adjusting the relative prices of commodities available at different times is different from the rule applied to the relative prices of contemporary commodities. The working of such a mechanism can be a fundamental source of instability of the intertemporal equilibria. This result seems to be a challenge for the stability of general equilibrium also in the context of more realistic nontÃ¢tonnement disequilibrium processes.
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Bibliographic InfoPaper provided by University of Rome La Sapienza, Department of Public Economics in its series Working Papers with number 67.
Date of creation: Feb 2002
Date of revision:
Intertemporal equilibrium; instability; capital.;
Find related papers by JEL classification:
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
- B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
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