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A Dynamic General Equilibrium Model with Centralized Auction Markets

Author

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  • Kazuya Kamiya

    (Faculty of Economics, University of Tokyo)

  • Takashi Shimizu

    (Department of Economics, Kansai University)

Abstract

A conventional wisdom in economics is that a model dealing frictionless markets with a large number of agents always yields a Walrasian outcome. In this paper we assess the above argument in a dynamic framework by modeling centralized auction markets, and show that in such markets the outcomes are not necessarily Walrasian; the set of stationary equilibria in our model is a continuum which includes the Walrasian equilibrium. Moreover, we also buildamodelondecentralized auction markets and obtain similar results.

Suggested Citation

  • Kazuya Kamiya & Takashi Shimizu, 2006. "A Dynamic General Equilibrium Model with Centralized Auction Markets," CIRJE F-Series CIRJE-F-417, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2006cf417
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2006/2006cf417.pdf
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    References listed on IDEAS

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    1. Akihiko Matsui & Takashi Shimizu, 2005. "A Theory Of Money And Marketplaces," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 35-59, February.
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