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The Dynamics of General Equilibrium: A Comment on Professor Gintis

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  • Ennio Bilancini
  • Fabio Petri

Abstract

This is a comment on Gintis (2007, 'The Dynamics of General Equilibrium', Economic Journal 117 (523) , 1280–1309), who provides an agent-based model of a Walrasian economy where the tâtonnement is replaced by imitation. His simulations show that the economy converges to the Walrasian equilibrium. Gintis concludes that 1) his stability results provide some justification for the importance placed upon the Walrasian model, and 2) models allowing agents to imitate successful others lead to an economy with a reasonable level of stability and efficiency. Since these conclusions appear to be intended as general, we caution that Gintis's findings can only be accepted for Walrasian models without capital goods; in models with capital goods imitation-based adjustments alter the equilibrium's data (which makes the demonstration of stability impossible) and raise other important problems (absent from Gintis's simulations) still awaiting exploration.

Suggested Citation

  • Ennio Bilancini & Fabio Petri, 2008. "The Dynamics of General Equilibrium: A Comment on Professor Gintis," Department of Economics University of Siena 538, Department of Economics, University of Siena.
    • Handle: RePEc:usi:wpaper:538
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    References listed on IDEAS

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    1. Bliss, C. J., 1975. "Capital Theory and the Distribution of Income," Elsevier Monographs, Elsevier, edition 1, number 9780720436044 edited by Bliss, C. J..
    2. Herbert E. Scarf, 1959. "Some Examples of Global Instability of the Competitive Equilibrium," Cowles Foundation Discussion Papers 79, Cowles Foundation for Research in Economics, Yale University.
    3. Herbert Gintis, 2007. "The Dynamics of General Equilibrium," Economic Journal, Royal Economic Society, vol. 117(523), pages 1280-1309, October.
    4. Robert Axtell, 2005. "The Complexity of Exchange," Economic Journal, Royal Economic Society, vol. 115(504), pages 193-210, June.
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    More about this item

    Keywords

    Walrasian equilibrium; imitation; stability; agent-based simulations; capital goods;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)

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