The equilibrium manifold with boundary constraints on the consumption sets
In this paper we consider a class of pure exchange economies in which the consumption plans may be restricted to be above a minimal level. This class is parameterised by the initial endowments and the constraints on the consumption. We show that the demand functions are locally Lipschitzian and almost everywhere continously differentiable even if some constraints may be binding. We then study the equilibrium manifold that is the graph of the correspondence which associates the equilibrium price vectors to the parameters. Using an adapted definition of regularity, we show that: the set of regular economies is open and of full measure; for each regular economy, there exists a finite odd number of equilibria and for each equilibrium price, there exists a local differentiable selection of the equilibrium manifold which selects the given price vector. In the last section, we show that the above results hold true when the constraints are fixed.
Volume (Year): 30 (2003)
Issue (Month): 2 Year 2003 (December)
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- Debreu, Gerard, 1970.
"Economies with a Finite Set of Equilibria,"
Econometric Society, vol. 38(3), pages 387-92, May.
- Radner, Roy, 1979. "Rational Expectations Equilibrium: Generic Existence and the Information Revealed by Prices," Econometrica, Econometric Society, vol. 47(3), pages 655-78, May.
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