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Producers’ Adjustment Trajectories Resulting in Equilibrium in the Economy with Linear Consumption Sets

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  • Agnieszka Lipieta

    (Cracow University of Economics)

Abstract

We consider the Debreu private ownership economy in which all consumption plans belong to a proper linear subspace of the commodity-price space Rl. This geometric property of consumption sets means that there is a dependency between quantities of some commodities in all consumption plans. Competitive mechanism makes producers adjust their plans of action to the same dependency. It results in the mild evolution of the production sector to offer production plans which are also contained in the given subspace of Rl. Modified production system and the initial consumption system can form an economy in equilibrium. The aim of this paper is to model gentle changes of producers’ activity that give equilibrium in the Debreu economy with consumption system reduced to a proper subspace of Rl without considering additional costs.

Suggested Citation

  • 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.
    • Handle: RePEc:psc:journl:v:7:y:2015:i:4:p:187-204
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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, April.
    2. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    3. Lipieta, Agnieszka, 2010. "The Debreu private ownership economy with complementary commodities and prices," Economic Modelling, Elsevier, vol. 27(1), pages 22-27, January.
    4. Michael Magill & Martine Quinzii, 2002. "Theory of Incomplete Markets, Volume 1," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262632543, December.
    5. 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.
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    Cited by:

    1. 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.
    2. Agnieszka Lipieta & Andrzej Malawski, 2021. "Eco-mechanisms within economic evolution: Schumpeterian approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-31, December.
    3. Agnieszka Lipieta & Ilona Ćwięczek, 2022. "Mechanisms leading to equilibrium in economy with financial market," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4166-4182, October.

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    More about this item

    Keywords

    Debreu economy; equilibrium; linear sets; projections;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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