A Dynamic General Equilibrium Model with Centralized Auction Markets

Kazuya Kamiya and Takashi Shimizu

No CIRJE-F-417, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: A conventional wisdom in economics is that a model dealing frictionless markets with a large number of agents always yields a Walrasian outcome. In this paper we assess the above argument in a dynamic framework by modeling centralized auction markets, and show that in such markets the outcomes are not necessarily Walrasian; the set of stationary equilibria in our model is a continuum which includes the Walrasian equilibrium. Moreover, we also buildamodelondecentralized auction markets and obtain similar results.

Pages: 28pages
Date: 2006-04
New Economics Papers: this item is included in nep-dge and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2006cf417

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