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Three Lectures on the Walrasian Hypotheses for Exchange Economies

Author

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  • Donald J. Brown

    () (Department of Economics, Yale University)

Abstract

This paper discusses the testable implications of the Walrasian hypotheses: H1 Observed market demand is the sum of consumer's demands derived from utility maximization subject to budget constraints. H2 There exists an observable (locally) unique equilibrium price system such that the observable market demand is equal to the observable market supply in every market. H3 The observed equilibrium price system is a (locally) stable equilibrium of tƒtonnement price adjustment. The main results are the Brown Matzkin Theorem: H1 is testable, and the Brown Shannon Theorem: H2 and H3 are not testable.

Suggested Citation

  • Donald J. Brown, 1997. "Three Lectures on the Walrasian Hypotheses for Exchange Economies," Working Papers 782, Economic Growth Center, Yale University.
  • Handle: RePEc:egc:wpaper:782
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    File URL: http://www.econ.yale.edu/growth_pdf/cdp782.pdf
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    References listed on IDEAS

    as
    1. Bhagwati, Jagdish N & Krueger, Anne O, 1973. "Exchange Control, Liberalization, and Economic Development," American Economic Review, American Economic Association, pages 419-427.
    2. Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters,in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64 National Bureau of Economic Research, Inc.
    3. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
    4. Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, pages 9-41.
    5. repec:cup:apsrev:v:87:y:1993:i:03:p:567-576_10 is not listed on IDEAS
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    Keywords

    Exchange Economies; Testable Restrictions;

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