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Stable Disequilibrium Prices: Macroeconomics and Increasing Returns I

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  • Geoffrey M. Heal

    (University of Essex)

Abstract

The paper establishes conditions for the existence of a set of prices which are stable and at which markets do not clear, providing a rigorous foundation for the existence of fixed-price equilibria via the macroeconomics of increasing returns. It analyzes a Walrasian price adjustment process for a general equilibrium economy with economies of scale in production.

Suggested Citation

  • Geoffrey M. Heal, 1982. "Stable Disequilibrium Prices: Macroeconomics and Increasing Returns I," Cowles Foundation Discussion Papers 650, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:650
    as

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    File URL: https://cowles.yale.edu/sites/default/files/files/pub/d06/d0650.pdf
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    References listed on IDEAS

    as
    1. Paul M. Sweezy, 1939. "Demand Under Conditions of Oligopoly," Journal of Political Economy, University of Chicago Press, vol. 47, pages 568-568.
    2. M. L. Weitzman, 1981. "Increasing Returns and Unemployment Equilibrium," Working papers 291, Massachusetts Institute of Technology (MIT), Department of Economics.
    3. Donald A. Walker (ed.), 2000. "Equilibrium," Books, Edward Elgar Publishing, volume 0, number 1585.
    4. Frank Hahn, 1978. "On Non-Walrasian Equilibria," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(1), pages 1-17.
    5. Grandmont, Jean-Michel, 1993. "Temporary general equilibrium theory," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 19, pages 879-922, Elsevier.
    6. Heal, Geoffrey, 1981. "Rational rationing and increasing returns an example," Economics Letters, Elsevier, vol. 8(1), pages 19-27.
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