Continuity

Michael Allingham
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Michael Allingham: University of Kent

Chapter 8 in Value, 1983, pp 59-67 from Palgrave Macmillan

Abstract: Abstract Given that equilibrium prices exist I now enquire whether such prices depend continuously on the attributes of the economy. This will be the case if equilibrium prices change only slowly as the preferences and endowments of the agents change; if this were not the case then the theory of value would have little empirical relevance. To return to the analogy of the ball and the spring, the theory of weight would be unsatisfactory if an arbitrarily small change in the diameter of the ball lead to a large change in the length of the spring, for then an approximate knowledge of the diameter of the ball, which is all that is available in practice, would not determine the weight of the ball even approximately.

Keywords: Equilibrium Price; Excess Demand; Critical Economy; Aggregate Supply; Budget Line (search for similar items in EconPapers)
Date: 1983
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DOI: 10.1007/978-1-349-17001-2_8

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