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Interest, profit and saving in Arrow-Debreu equilibrium models

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  • Saverio M. Fratini

    (Roma Tre University)

Abstract

The paper aims to point out that the concepts of interest, profit and saving that we come across in the Arrow-Debreu equilibrium models are significantly different from what is usually indicated by these same terms in economic analysis. In fact, in the Arrow-Debreu models, they are not related to the investment of capital. As we shall try to show, the difficulties that the Arrow-Debreu theory encounters with reference to capital and related concepts derive from the hypothesis of markets open in a single moment that characterizes these models.

Suggested Citation

  • Saverio M. Fratini, 2020. "Interest, profit and saving in Arrow-Debreu equilibrium models," Bulletin of Political Economy, Bulletin of Political Economy, vol. 14(1), pages 39-53, June.
    • Handle: RePEc:awu:journl:v:14:y:2020:i:1:p:39-53
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    References listed on IDEAS

    as
    1. Saverio M. Fratini, 2019. "Neoclassical theories of stationary relative prices and the supply of capital," Metroeconomica, Wiley Blackwell, vol. 70(4), pages 723-737, November.
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    8. Fratini, Saverio M., 2020. "Incomes from Capital in Alternative Economic Theories," Centro Sraffa Working Papers CSWP42, Centro di Ricerche e Documentazione "Piero Sraffa".
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    More about this item

    Keywords

    Arrow-Debreu general equilibrium; own-rate of interest; firm profit; saving;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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