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A note on continuously decomposed evolving exchange economies


  • Lehmann-Waffenschmidt, Marco


It is routine to demonstrate in the exchange economy framework that small changes of individual preferences and endowments always result in small changes of the derived excess demand functions as one should expect. Though being as desirable for reasons of the consistency of the whole approach, however, a precise proof of the converse direction so far is still open to question. The present paper shows that it is actually true. We use a decomposition method for aggregate excess demand functions developed by Mas-Colell which is derived from the well-known decomposition method developed by Sonnenschein and perfected by Debreu and Mantel. Our result fills in a notorious gap in the line of economic justification usually given for this decomposition method.

Suggested Citation

  • Lehmann-Waffenschmidt, Marco, 2004. "A note on continuously decomposed evolving exchange economies," Dresden Discussion Paper Series in Economics 01/04, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
  • Handle: RePEc:zbw:tuddps:0104

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    continuous decomposition; aggregate excess demand;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General


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