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On the number of critical equilibria separating two equilibria

Author

Listed:
  • Balasko, Yves

    () (Department of Economics, University of York)

Abstract

It is shown that two arbitrary equilibria in the general equilibrium model without sign restrictions on endowments can be joined by a continuous equilibrium path that contains at most two critical equilibria. This property is strengthened by showing that regular equilibria having an index equal to one, a necessary condition for stability, can be joined by a path containing no critical equilibrium. These properties follow from the real-algebraic nature of the set of critical equilibria in any fiber of the equilibrium manifold.

Suggested Citation

  • Balasko, Yves, 2012. "On the number of critical equilibria separating two equilibria," Theoretical Economics, Econometric Society, vol. 7(1), January.
  • Handle: RePEc:the:publsh:822
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    File URL: http://econtheory.org/ojs/index.php/te/article/viewFile/20120163/6164/212
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    Cited by:

    1. Andrea Loi & Stefano Matta, 2016. "On the topology of the set of critical equilibria," International Journal of Economic Theory, The International Society for Economic Theory, vol. 12(2), pages 107-126, June.
    2. Balasko, Yves, 2014. "The transfer problem: A complete characterization," Theoretical Economics, Econometric Society, vol. 9(2), May.

    More about this item

    Keywords

    Equilibrium prices; equilibrium manifold; equilibrium path; critical equilibrium; catastrophe;

    JEL classification:

    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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