On the number of critical equilibria separating two equilibria

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,: Department of Economics, University of York
Authors registered in the RePEc Author Service: Yves Balasko

Theoretical Economics, 2012, vol. 7, issue 1

Abstract: It is shown that two arbitrary equilibria in the general equilibrium model without sign restrictions on endowments can be joined by a continuous equilibrium path that contains at most two critical equilibria. This property is strengthened by showing that regular equilibria having an index equal to one, a necessary condition for stability, can be joined by a path containing no critical equilibrium. These properties follow from the real-algebraic nature of the set of critical equilibria in any fiber of the equilibrium manifold.

Keywords: Equilibrium prices; equilibrium manifold; equilibrium path; critical equilibrium; catastrophe (search for similar items in EconPapers)
JEL-codes: D41 D51 (search for similar items in EconPapers)
Date: 2012-01-09
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Citations: View citations in EconPapers (2)

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