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Adjustment processes resulting in equilibrium in the private ownership economy

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  • Agnieszka Lipieta

    (Cracow University of Economics)

Abstract

The paper considers a private ownership economy in which economic agents could realize their aims at given prices, Walras Law is satisfied but agents' optimal plans of action do not lead to an equilibrium in the economy. It means that the market clearing condition is not satisfied for agents' optimal plans of action. In this context, the paper puts forward three specific adjustment processes resulting in equilibrium in a transformation of the initial economy. Specifically, it is shown, by the use of strict mathematical reasoning, that if there is no equilibrium in a~private ownership economy at given prices, then, under some natural economic assumptions, after a~mild evolution of the production sector, equilibrium at unchanged prices can be achieved.

Suggested Citation

  • Agnieszka Lipieta, 2018. "Adjustment processes resulting in equilibrium in the private ownership economy," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 10(4), pages 305-332, December.
    • Handle: RePEc:psc:journl:v:10:y:2018:i:4:p:305-332
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    References listed on IDEAS

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    1. James C. Moore, 2007. "General Equilibrium and Welfare Economics," Springer Books, Springer, number 978-3-540-32223-8, June.
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    5. Hurwicz,Leonid & Reiter,Stanley, 2008. "Designing Economic Mechanisms," Cambridge Books, Cambridge University Press, number 9780521724104.
    6. Leonid Hurwicz, 1994. "Economic design, adjustment processes, mechanisms, and institutions," Review of Economic Design, Springer;Society for Economic Design, vol. 1(1), pages 1-14, December.
    7. Radner, Roy, 1972. "Existence of Equilibrium of Plans, Prices, and Price Expectations in a Sequence of Markets," Econometrica, Econometric Society, vol. 40(2), pages 289-303, March.
    8. Marschak, Thomas A., 2005. "Organization design," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 2, volume 3, chapter 27, pages 1359-1440, Elsevier.
    9. Patrick Joyce, 1984. "The Walrasian Tâtonnement Mechanism and Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 416-425, Autumn.
    10. Agnieszka Lipieta, 2015. "Producers’ Adjustment Trajectories Resulting in Equilibrium in the Economy with Linear Consumption Sets," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 7(4), pages 187-204, December.
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    Cited by:

    1. Elżbieta Pliś, 2020. "Diversity and Innovation in Economic Evolution," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 12(4), pages 347-367, December.

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    More about this item

    Keywords

    private ownership economy; equilibrium; Walras Law; adjustment processes;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D2 - Microeconomics - - Production and Organizations

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