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Stationary Temporary Equilibrium in a General Model of Optimal Accumulation and Trade

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This paper analyzes the movement of market-clearing prices in an intertemporal general equilibrium framework and, in particular, proves the existence of a stationary temporary equilibrium. A model of a competitive economy is developed which consists of several 'small' countries engaged in consumption, production and trade. Following Hicks, one way to look at the evolution of an economic system is to view it as a succession of temporary competitive equilibria. The aspect of stationarity is interesting because if the sequence of temporary equilibria converges to a steady-state, it must converge to a stationary temporary equilibrium. A linear-logarithmic economy exhibits convergence.

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  • Manjira Datta, "undated". "Stationary Temporary Equilibrium in a General Model of Optimal Accumulation and Trade," Working Papers 2132839, Department of Economics, W. P. Carey School of Business, Arizona State University.
    • Handle: RePEc:asu:wpaper:2132839
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    1. Jean-Michel Grandmont, 1974. "On the Short-Run Equilibrium in a Monetary Economy," International Economic Association Series, in: Jacques H. Drèze (ed.), Allocation under Uncertainty: Equilibrium and Optimality, chapter 12, pages 213-228, Palgrave Macmillan.
    2. Datta, Manjira, 1997. "Externalities and Price Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 587-603, August.
    3. Hildenbrand, W & Mertens, J F, 1972. "Upper Hemi-Continuity of the Equilibrium-Set Correspondence for Pure Exchange Economies," Econometrica, Econometric Society, vol. 40(1), pages 99-108, January.
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    5. Wan, Henry Jr. & Majumdar, Mukul, 1980. "Trade under temporary equilibrium: Evolution in a loglinear world," Journal of International Economics, Elsevier, vol. 10(1), pages 37-62, February.
    6. Jean-Michel Grandmont & Yves Younes, 1972. "On the Role of Money and the Existence of a Monetary Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 39(3), pages 355-372.
    7. Datta, M., 1992. "A general Model of Trade and Optimal Accumulation in a Small Open Economy: The Case of Production Uncertainty," Papers 92-8, Saskatchewan - Department of Economics.
    8. Becker, Robert & Boldrin, Michele & Jones, Ronald (ed.), 1993. "General Equilibrium, Growth, and Trade II," Elsevier Monographs, Elsevier, edition 1, number 9780120846559.
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    More about this item

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • F10 - International Economics - - Trade - - - General

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