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Equilibrium in Disequilibrium: A Diagrammatic Exposition


  • Meenakshi Rajeev

    (Institute for Social and Economic Change Nagarbhavi, Bangalore, India)


Even when a developing country moves towards a market economy characterised by competitive prices, there are several goods like water, essential food items, infrastructure related goods and so on whose prices cannot be left to the market. When a planner fixes prices of such goods the resulting equilibrium will have to be a rationed equilibrium. This paper discusses one of the most important equilibrium concepts in a disequilibrium situation viz., Benassy equilibrium (1975a,b). This paper provides a diagrammatic frame-work to represent this concept of equilibrium using three dimensional Edgeworth box diagrams.

Suggested Citation

  • Meenakshi Rajeev, 2004. "Equilibrium in Disequilibrium: A Diagrammatic Exposition," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 39(2), pages 383-392, July.
  • Handle: RePEc:dse:indecr:v:39:y:2004:i:2:p:383-392

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    References listed on IDEAS

    1. Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-598, October.
    2. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-597, May.
    3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    4. Varian, Hal R., 1985. "Non-parametric analysis of optimizing behavior with measurement error," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 445-458.
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    More about this item


    Disequilibrium; Rationing Effective Demand; Perceived Constraint; Edgeworth Box Digram;

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies


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