Balanced Growth in Decentralized Economies

Alexander P. Abramov
Additional contact information
Alexander P. Abramov: Russian Academy of Sciences

Chapter Chapter 2 in Balanced and Cyclical Growth in Models of Decentralized Economy, 2014, pp 7-40 from Springer

Abstract: Abstract In this chapter, we consider decision making algorithms that ensure balanced growth in decentralized economic systems. We assume that the economic system under consideration consists of a finite number monoproduct sectors whose outputs in any time period are defined by Leontief production functions. We show that there exists a dynamic system of prices where all the sectors ensure balanced growth for the whole economic system by aiming to maximize their profit. Prices have the following characteristic property: They depend on the volume of production so that the price of a product goes down as its output grows. The dependencies under consideration ensure that profit is a unimodal function of the volume of production in the next technological cycle. This ensures that each of the sectors selects its production plans in a unique way. We also consider the case where prices are set individually for each buyer depending on the order size. This is usual for wholesale trade, where the price of a product goes down as the order size grows.

Keywords: Leontief Production Function; Order Size; Frobenius Vector; Payments Balance; Price Coefficient (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-319-07917-2_2

Ordering information: This item can be ordered from
http://www.springer.com/9783319079172

DOI: 10.1007/978-3-319-07917-2_2

Access Statistics for this chapter

More chapters in Lecture Notes in Economics and Mathematical Systems from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().