Existence and Stability of Dynamic Exchange Equilibria

Craig McLaren ()

No 201508, Working Papers from University of California at Riverside, Department of Economics

Abstract: Economic general equilibrium results when the forces of supply and demand bring market participants into agreement as to the prices at which good should sell, and the quantities that should be sold. While it has been shown mathematically, that such exchange prices and quantities can be simultaneously determined for all goods in an economy, a mechanism that describes how such equilibria are achieved in practice has never been proposed. This paper demonstrates that such equilibria result naturally from the dynamic interaction of market participants. The dynamic interaction modeled in this paper can be used to study the interaction of demographic groups, which drives the evolution of a community. This model should also be useful in studying the effects of public policy and other external factors on markets.

Keywords: Dynamic General General Equalibrium; Existence; Stability; Dynamic Tatonnement (search for similar items in EconPapers)
JEL-codes: C62 D51 (search for similar items in EconPapers)
Pages: 23 Pages
Date: 2015-07
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ucr:wpaper:201508

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