Multiple equilibria and chaos in a discrete tâtonnement process
The purpose of this note is to demonstrate a sufficient condition for discrete tâtonnement process to lead to chaos in a general equilibrium model with multiple commodities. The result indicates that as the speed of price adjustment increases the discrete tâtonnement process is complex in a general equilibrium economy in which there are multiple equilibria.
|Date of creation:||15 Jul 2010|
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