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Intertemporal Competitive Equilibrium, Capital And The Stability Of Tâtonnement Pricing Revisited

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  • Sergio Parrinello

Abstract

This paper reconsiders a recent criticism which contends that the theory of general intertemporal equilibrium, formulated by taking the physical endowments of capital goods as given, is not protected from the problem of capital at the centre of the two Cambridges debate of the 1960s. The author confirms such a criticism following a different approach. He argues that the stability analysis of an intertemporal equilibrium via tâtonnement must be consistent with a uniform rate of return on capital. He shows that the resulting non‐orthodox tâtonnement subverts the traditional analysis of equilibrium stability.

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  • Sergio Parrinello, 2005. "Intertemporal Competitive Equilibrium, Capital And The Stability Of Tâtonnement Pricing Revisited," Metroeconomica, Wiley Blackwell, vol. 56(4), pages 514-531, November.
    • Handle: RePEc:bla:metroe:v:56:y:2005:i:4:p:514-531
    DOI: 10.1111/j.1467-999X.2005.00228.x
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    References listed on IDEAS

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    1. Smale, Steve, 1976. "A convergent process of price adjustment and global newton methods," Journal of Mathematical Economics, Elsevier, vol. 3(2), pages 107-120, July.
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    Cited by:

    1. Sergio Parrinello, 2008. "A Reply To The Comment By Duncan Foley," Metroeconomica, Wiley Blackwell, vol. 59(2), pages 317-321, May.
    2. Saverio M. Fratini, 2019. "On The Second Stage Of The Cambridge Capital Controversy," Journal of Economic Surveys, Wiley Blackwell, vol. 33(4), pages 1073-1093, September.
    3. Sergio Parrinello, 2022. "Numéraire problems and market adjustments," Metroeconomica, Wiley Blackwell, vol. 73(1), pages 126-143, February.
    4. Sergio Parrinello, 2008. "The Stability Of General Intertemporal Equilibrium: A Note On Schefold," Metroeconomica, Wiley Blackwell, vol. 59(2), pages 305-312, May.

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