IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Long Run Evolution of a Rationed Equilibrium Model

Listed author(s):
  • Blad, M.C.
  • Kirman, A.P.

In his recent book "The Theory of Unemployment Reconsidered" Malinvaud (1977) presents a model in which prices and wages are fixed and equilibria are achieved by quantity adjustments in the goods and labour markets. These adjustments are effected by rationing schemes. This model, although it provides a framework for macroeconomic analysis, has the drawback that it is wholly static. The notion that prices and wages are completely rigid in the short run is acceptable as an idealisation of the real situation. However, in the longer term market forces must influence prices and wages, and the latter will respond to excess demands and supplies in different markets. Our aim is to specify such an adjustment process, which will be slow relative to the quantity adjustments in each market, and then to examine the evolution and stability of prices and wages. Although it is possible with suitable assumptions to obtain stability results, the framework inherired from Malinvaud and developed by Hildenbrand and Hildenbrand (1976) is not a wholly satisfactory one in which to study the dynamics of prices and wages. In particular the simple imposition of a plausible adjustment process on the Malinvaud model does not produce the sort of phonomena one might naturally expect to observe. This raises some interesting, and we think fundamental problems, which will bot be described here, but will be the subject of a later paper by one of us.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 128.

in new window

Length: 15 pages
Date of creation: 1978
Handle: RePEc:wrk:warwec:128
Contact details of provider: Postal:

Phone: +44 (0) 2476 523202
Fax: +44 (0) 2476 523032
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:128. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Margaret Nash)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.