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The Dynamics of General Equilibrium: A Comment on Professor Gintis

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Author Info
Ennio Bilancini ()
Fabio Petri ()

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Abstract

This is a comment on Gintis (2007, 'The Dynamics of General Equilibrium', Economic Journal 117 (523) , 1280–1309), who provides an agent-based model of a Walrasian economy where the tâtonnement is replaced by imitation. His simulations show that the economy converges to the Walrasian equilibrium. Gintis concludes that 1) his stability results provide some justification for the importance placed upon the Walrasian model, and 2) models allowing agents to imitate successful others lead to an economy with a reasonable level of stability and efficiency. Since these conclusions appear to be intended as general, we caution that Gintis's findings can only be accepted for Walrasian models without capital goods; in models with capital goods imitation-based adjustments alter the equilibrium's data (which makes the demonstration of stability impossible) and raise other important problems (absent from Gintis's simulations) still awaiting exploration.

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 538.

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Date of creation: Aug 2008
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Handle: RePEc:usi:wpaper:538

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Related research
Keywords: Walrasian equilibrium; imitation; stability; agent-based simulations; capital goods;

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Find related papers by JEL classification:
D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (includes Austrian, Marshallian, Walrasian)

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  1. Herbert E. Scarf, 1959. "Some Examples of Global Instability of the Competitive Equilibrium," Cowles Foundation Discussion Papers 79, Cowles Foundation, Yale University. [Downloadable!]
  2. Herbert Gintis, 2007. "The Dynamics of General Equilibrium," Economic Journal, Royal Economic Society, vol. 117(523), pages 1280-1309, October. [Downloadable!] (restricted)
  3. Robert Axtell, 2005. "The Complexity of Exchange," Economic Journal, Royal Economic Society, vol. 115(504), pages F193-F210, 06. [Downloadable!] (restricted)
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