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Single and Attractive: Uniqueness and Stability of Economic Equilibria under Monotonicity Assumptions

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  • Patrizio Bifulco
  • Jochen Gluck
  • Oliver Krebs
  • Bohdan Kukharskyy

Abstract

This paper characterizes equilibrium properties of a broad class of economic models that allow multiple heterogeneous agents to interact in heterogeneous manners across several markets. Our key contribution is a new theorem providing sufficient conditions for uniqueness and stability of equilibria in this class of models. To illustrate the applicability of our theorem, we characterize the general equilibrium properties of two commonly used quantitative trade models. Specifically, our analysis provides a first proof of uniqueness and stability of the equilibrium in multi-country trade models featuring (i) multiple sectors, or (ii) heterogeneity across countries in terms of their labor cost shares. These examples also provide a practical toolkit for future research on how our theorem can be applied to establish uniqueness and stability of equilibria in a broad set of economic models.

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  • Patrizio Bifulco & Jochen Gluck & Oliver Krebs & Bohdan Kukharskyy, 2022. "Single and Attractive: Uniqueness and Stability of Economic Equilibria under Monotonicity Assumptions," Papers 2209.02635, arXiv.org.
    • Handle: RePEc:arx:papers:2209.02635
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    References listed on IDEAS

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    Cited by:

    1. Alexis Akira Toda & Kieran James Walsh, 2024. "Recent Advances on Uniqueness of Competitive Equilibrium," Papers 2402.00998, arXiv.org.

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