Perturbation theory in a pure exchange non-equilibrium economy

Samuel E. Vazquez and Simone Severini

MPRA Paper from University Library of Munich, Germany

Abstract: We develop a formalism to study linearized perturbations around the equilibria of a pure exchange economy. With the use of mean field theory techniques, we derive equations for the flow of products in an economy driven by heterogeneous preferences and probabilistic interaction between agents. We are able to show that if the economic agents have static preferences, which are also homogeneous in any of the steady states, the final wealth distribution is independent of the dynamics of the non-equilibrium theory. In particular, it is completely determined in terms of the initial conditions, and it is independent of the probability, and the network of interaction between agents. We show that the main effect of the network is to determine the relaxation time via the usual eigenvalue gap as in random walks on graphs.

Keywords: non-equilibrium economics; perturbation theory (search for similar items in EconPapers)
JEL-codes: C62 D5 D51 (search for similar items in EconPapers)
Date: 2009-04-08
New Economics Papers: this item is included in nep-upt
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