IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/52125.html
   My bibliography  Save this paper

On Non-Tatonnement Processes

Author

Listed:
  • Sambracos, Evangelos
  • Yannelis, Dimitris

Abstract

The objective of this study is to examine the stability of a general equilibrium model in which trade takes place at non-equilibrium prices. Quantity constraints are perceived by the traders and effective demands and supplies are explicitly derived from utility and profit maximization. Therefore, spillover effects are taken into account whenever a quantity constraint is binding. Furthermore, we resolve the problem of bankruptcy as follows. Traders, in maximizing their objective functions, plan at the same time not to go bankrupt, by constraining their behavior explicitly. Such a constrained behavior assigns to money a role as a medium of exchange. The system is shown to be globally stable, when both prices and quantity constraints adjust in disequilibrium.

Suggested Citation

  • Sambracos, Evangelos & Yannelis, Dimitris, 1993. "On Non-Tatonnement Processes," MPRA Paper 52125, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52125
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/52125/1/MPRA_paper_52125.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Champsaur, Paul & Dreze, Jacques H & Henry, Claude, 1977. "Stability Theorems with Economic Applications," Econometrica, Econometric Society, vol. 45(2), pages 273-294, March.
    2. MacKay, Robert J & Weber, Warren E, 1977. "Consumer Behavior and Quantity Constraints: Some Implications for Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 9(1), pages 21-31, February.
    3. John C. Eckalbar, 1979. "Global Stability with Spillovers," The Economic Record, The Economic Society of Australia, vol. 55(2), pages 172-178, June.
    4. Eckalbar, John C, 1980. "The Stability of Non-Walrasian Processes: Two Examples," Econometrica, Econometric Society, vol. 48(2), pages 371-386, March.
    5. Franklin M. Fisher, 1978. "Quantity Constraints, Spillovers and the Hahn Process," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(1), pages 19-31.
    6. Grossman, Herschel I, 1971. "Money, Interest, and Prices in Market Disequilibrium," Journal of Political Economy, University of Chicago Press, vol. 79(5), pages 943-961, Sept.-Oct.
    7. E. C. H. Veendorp, 1975. "Stable Spillovers among Substitutes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(3), pages 445-456.
    8. Fisher, Franklin M, 1981. "Stability, Disequilibrium Awareness, and the Perception of New Opportunities," Econometrica, Econometric Society, vol. 49(2), pages 279-317, March.
    9. Abraham, Haim & Whittaker, John, 1989. "Is Dynamic Stability of Walrasian Equilibrium Achieved through Falling Target Utilities?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(3), pages 507-511, August.
    10. repec:bla:ecorec:v:55:y:1979:i:149:p:172-78 is not listed on IDEAS
    11. Grandmont, Jean-Michel, 1993. "Temporary general equilibrium theory," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 19, pages 879-922, Elsevier.
    12. Varian, Hal R., 1975. "On persistent disequilibrium," Journal of Economic Theory, Elsevier, vol. 10(2), pages 218-228, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John C. Eckalbar, 1979. "Global Stability with Spillovers," The Economic Record, The Economic Society of Australia, vol. 55(2), pages 172-178, June.
    2. Don Patinkin, 1987. "Walras' Law," WIDER Working Paper Series wp-1987-013, World Institute for Development Economic Research (UNU-WIDER).
    3. Goulven Rubin, 2005. "La controverse entre Clower et Patinkin au sujet de la validité de la loi de Walras," Revue économique, Presses de Sciences-Po, vol. 56(1), pages 5-24.
    4. M. Scattaglia, 1994. "Politiche per l'occupazione e Microfondamenti "Keynesiani" dell'economia del lavoro," Working Papers 196, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Sharefkin, Mark, 1982. "Stabilization and Growth Policy with Uncertain Oil Prices: Some Rules of Thumb," Working Paper Series 60, Research Institute of Industrial Economics.
    6. Thomas H. McCurdy & Demetrius C. Yannelis, 1984. "Simultaneous Price-Quantity Adjustment in the Presence of Spillovers Across Markets," Working Paper 569, Economics Department, Queen's University.
    7. Escudé, Guillermo, 1984. "On equilibrium with price rigidities and rationing," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 4(2), November.
    8. van der Laan, G. & Talman, A.J.J., 2002. "Dynamic Adjustment of Supply Constrained Disequilibria to Walrasian Equilibrium," Other publications TiSEM 8c5d443d-92c8-4e82-bcef-3, Tilburg University, School of Economics and Management.
    9. Sergeyev, Dmitriy & Iovino, Luigi, 2018. "Central Bank Balance Sheet Policies Without Rational Expectations," CEPR Discussion Papers 13100, C.E.P.R. Discussion Papers.
    10. Bloch, Francis & van den Nouweland, Anne, 2020. "Farsighted stability with heterogeneous expectations," Games and Economic Behavior, Elsevier, vol. 121(C), pages 32-54.
    11. Ichiishi, Tatsuro, 1985. "Management versus ownership, II," European Economic Review, Elsevier, vol. 27(2), pages 115-138, March.
    12. Kelly, David L. & Shorish, Jamsheed, 2000. "Stability of Functional Rational Expectations Equilibria," Journal of Economic Theory, Elsevier, vol. 95(2), pages 215-250, December.
    13. Auster, Sarah & Kettering, Jeremy & Kochov, Asen, 2024. "Sequential trading with coarse contingencies," Journal of Economic Theory, Elsevier, vol. 220(C).
    14. Herings, Jean-Jacques & van der Laan, Gerard & Talman, Dolf & Venniker, Richard, 1997. "Equilibrium adjustment of disequilibrium prices," Journal of Mathematical Economics, Elsevier, vol. 27(1), pages 53-77, February.
    15. Cuong Van & Frank Page & Myrna Wooders, 2007. "Risky arbitrage, asset prices, and externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(3), pages 475-491, December.
    16. Kubler, Felix & Scheidegger, Simon, 2023. "Uniformly self-justified equilibria," Journal of Economic Theory, Elsevier, vol. 212(C).
    17. J. Peter Neary & Joseph E. Stiglitz, 1979. "Towards A Reconstruction of Keynesian Economics: Expectations and Constrained Equilibria," NBER Working Papers 0376, National Bureau of Economic Research, Inc.
    18. Lionel de Boisdeffre, 2013. "Price revelation and existence of equilibrium in a private belief economy," Post-Print halshs-01053471, HAL.
    19. Michael Woodford, 2013. "Macroeconomic Analysis Without the Rational Expectations Hypothesis," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 303-346, May.
    20. Fratini, Saverio M. & Levrero, Enrico Sergio, 2009. "A remark on the supposed equivalence between complete markets and perfect foresight hypothesis," MPRA Paper 15988, University Library of Munich, Germany.

    More about this item

    Keywords

    General equilibrium; utility; profit maximization; spillover effects.;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:52125. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.