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The sequential trading approach to disequilibrium dynamics

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  • Lux, Thomas

Abstract

This paper presents a generalization of Varian's original contribution on disequilibrium models characterized by sequential trading. By building up the model on the differentiation of regimes we make the subject more easily comparable to standard disequilibrium models. Compared to the latter (the simultaneous trading models) one obtains a totally new kind of steady states where both the labour and goods market clear but the usual marginal productivity conditions for Walrasian equilibria are not fullfilled. It is shown that the stability of these non-Walrasian equilibria depends on the adjustment speeds of prices and wages whereas their existence depends on the assumption of a competitive adjustment on both markets.

Suggested Citation

  • Lux, Thomas, 1992. "The sequential trading approach to disequilibrium dynamics," Open Access Publications from Kiel Institute for the World Economy 1510, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkie:1510
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    File URL: https://www.econstor.eu/bitstream/10419/1510/1/755825780.pdf
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    References listed on IDEAS

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    3. Jean-Pascal Benassy, 1975. "Neo-Keynesian Disequilibrium Theory in a Monetary Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(4), pages 503-523.
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    6. Philippe MICHEL, 1982. "Expected Equilibrium and Fix-Price Equilibrium in a Simple Macroeconomic Model : Equivalence Theorems and Stability," Discussion Papers (REL - Recherches Economiques de Louvain) 1982013, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Homburg, Stefan, 1984. "Das Walras-Gesetz bei Mengenrestriktionen," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 199(2), pages 179-183.
    8. Honkapohja, Seppo & Ito, Takatoshi, 1983. "Stability with regime switching," Journal of Economic Theory, Elsevier, vol. 29(1), pages 22-48, February.
    9. Eckalbar, John C, 1980. "The Stability of Non-Walrasian Processes: Two Examples," Econometrica, Econometric Society, vol. 48(2), pages 371-386, March.
    10. Ito, Takatoshi, 1980. "Disequilibrium growth theory," Journal of Economic Theory, Elsevier, vol. 23(3), pages 380-409, December.
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    13. Englmann Frank C., 1984. "Replik auf: Das Walras-Gesetz bei Mengenrestriktionen," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 199(2), pages 184-185, February.
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    Cited by:

    1. Jovanovic, Franck & Schinckus, Christophe, 2017. "Econophysics and Financial Economics: An Emerging Dialogue," OUP Catalogue, Oxford University Press, number 9780190205034.

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