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Existence and Stability of Dynamic Exchange Equilibria

Author

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  • Craig McLaren

    (Department of Economics, University of California Riverside)

Abstract

Economic general equilibrium results when the forces of supply and demand bring market participants into agreement as to the prices at which good should sell, and the quantities that should be sold. While it has been shown mathematically, that such exchange prices and quantities can be simultaneously determined for all goods in an economy, a mechanism that describes how such equilibria are achieved in practice has never been proposed. This paper demonstrates that such equilibria result naturally from the dynamic interaction of market participants. The dynamic interaction modeled in this paper can be used to study the interaction of demographic groups, which drives the evolution of a community. This model should also be useful in studying the effects of public policy and other external factors on markets.

Suggested Citation

  • Craig McLaren, 2015. "Existence and Stability of Dynamic Exchange Equilibria," Working Papers 201508, University of California at Riverside, Department of Economics.
    • Handle: RePEc:ucr:wpaper:201508
    as

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    File URL: https://economics.ucr.edu/repec/ucr/wpaper/201508.pdf
    File Function: First version, 2015
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    References listed on IDEAS

    as
    1. Craig McLaren, 2015. "Dynamic Model of the Individual Consumer," Working Papers 201507, University of California at Riverside, Department of Economics.
    2. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Dynamic General General Equalibrium; Existence; Stability; Dynamic Tatonnement;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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