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General equilibrium

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  • Monique Florenzano

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Unlike partial equilibrium analysis which study the equilibrium of a particular market under the clause "ceteris paribus" that revenues and prices on the other markets stay approximately unaffected, the ambition of a general equilibrium model is to analyze the simultaneous equilibrium in all markets of a competitive economy. Definition of the abstract model, some of its basic results and insights are presented. The important issues of uniqueness and local uniqueness of equilibrium are sketched ; they are the condition for a predictive power of the theory and its ability to allow for statics comparisons. Finally, we review the main extensions of the general equilibrium model. Besides the natural extensions to infinitely many commodities and to a continuum of agents, some examples show how economic theory can accommodate the main ideas in order to study some contexts which were not thought of by the initial model.

Suggested Citation

  • Monique Florenzano, 2007. "General equilibrium," Post-Print halshs-00250167, HAL.
    • Handle: RePEc:hal:journl:halshs-00250167
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00250167
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    References listed on IDEAS

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    1. Gale, D. & Mas-Colell, A., 1975. "An equilibrium existence theorem for a general model without ordered preferences," Journal of Mathematical Economics, Elsevier, vol. 2(1), pages 9-15, March.
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    More about this item

    Keywords

    incomplete markets; Commodity space; price space; exchange economy; production economy; feasible allocations; equilibrium; quasi-equilibrium; Pareto optimum; core; edgeworth equilibrium allocutions; time and uncertainty; continuum economies; non-convexities; public goods; incomplete markets.; Espace des biens; espace des prix; économie d'échange; économie de production; allocations réalisables; équilibre; quasi-équilibre; optimum de Pareto; coeur; équilibres d'Edgeworth; temps et incertitude; économies continues; non convexités; biens publics; marchés incomplets.;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D60 - Microeconomics - - Welfare Economics - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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