Monotone comparative statics in general equilibrium

Francesco Ruscitti () and Ram Dubey ()
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Francesco Ruscitti: John Cabot University, Department of Economics and Social Sciences

Economics Bulletin, 2016, vol. 36, issue 1, 187-197

Abstract: Under certain conditions on the excess demand function, it is shown that the set of equilibrium prices coincides with the set of maximizers of a potential function. Therefore, monotone comparative statics techniques can be employed to study how equilibrium prices change when there are shocks to the parameters of the model. As a by-product of our analysis, it turns out that the set of equilibrium prices is a convex lattice.

Keywords: Monotone comparative statics; Potential function; Supermodularity; Walrasian equilibrium; Weak gross substitution property (search for similar items in EconPapers)
JEL-codes: C6 D5 (search for similar items in EconPapers)
Date: 2016-02-11
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