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A Dynamic General Equilibrium Model with Centralized Auction Markets

Author

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  • Kazuya Kamiya

    (Faculty of Economics, University of Tokyo)

  • Takashi Shimizu

    (Department of Economics, Kansai University)

Abstract

A conventional wisdom in economics is that a model dealing frictionless markets with a large number of agents always yields a Walrasian outcome. In this paper we assess the above argument in a dynamic framework by modeling centralized auction markets, and show that in such markets the outcomes are not necessarily Walrasian; the set of stationary equilibria in our model is a continuum which includes the Walrasian equilibrium. Moreover, we also buildamodelondecentralized auction markets and obtain similar results.

Suggested Citation

  • Kazuya Kamiya & Takashi Shimizu, 2006. "A Dynamic General Equilibrium Model with Centralized Auction Markets," CIRJE F-Series CIRJE-F-417, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2006cf417
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2006/2006cf417.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kazuya Kamiya & Takashi Shimizu, 2013. "Dynamic Auction Markets with Fiat Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(2‐3), pages 349-378, March.

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