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John Geanakoplos
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John Geanakoplos: Yale University

A chapter in Value and Capital: Fifty Years Later, 1991, pp 145-150 from Palgrave Macmillan

Abstract: Abstract The rapidly growing field called ‘general equilibrium with incomplete markets’ (GEI) has already made fundamental contributions in three different areas of economic theory. First, it has thrown up math ematical problems so delicate that they have forced economists for the first time to abandon that old war-horse—Brouwer’s fixed point theorem—and to invent (or borrow from mathematics) a new methodology for constructing existence proofs for general equilib rium. Second, it has demonstrated a significant difference between real and financial assets. Third, it has, to my mind, greatly increased the presumption against Pareto efficiency of the market process. The model appears to be flexible and rich enough to include many of the fundamental paradigms of finance and macroeconomics.

Keywords: General Equilibrium; Financial Asset; Incomplete Market; Pareto Efficiency; Perfect Competition (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-11029-2_9

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DOI: 10.1007/978-1-349-11029-2_9

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