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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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    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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