Sergio, Parrinello
(2004):
*Intertemporal competitive equilibrium: a reappraisal of a basic source of instability.*
Published in: Working Paper Dipartimento di Economia Pubblica
, Vol. 67,
(April 2004): pp. 1-20.

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## Abstract

Abstract This paper resumes a source of instability of intertemporal equilibrium which was anticipated by Garegnani (2003) and criticized by Schefold (2004). The author points out that a non orthodox tâtonnement pricing must be accepted if the theory has to be consistent with the Jevons’s law of unique price. Such tâtonnement prescribes that the rule for adjusting the relative prices of commodities available at different times is different from the rule applied to the relative prices of contemporary commodities. The working of such a mechanism can be a fundamental source of instability of the intertemporal equilibria. This result seems to be a challenge for the stability of general equilibrium also in the context of more realistic nontâtonnement disequilibrium processes. Final version of this working paper: S.Parrinello, “Intertemporal Competitive Equilibrium, Capital and the Stability of Tâtonnement Pricing Revisited”, Metroeconomica 56:4 (2005). Further development: S. Parrinello, Numeraire, Savings and the Instability of a Competitive Equilibrium”, Metroeconomica 62:2 (2011) 328–355.

Item Type: | MPRA Paper |
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Original Title: | Intertemporal competitive equilibrium: a reappraisal of a basic source of instability |

Language: | English |

Keywords: | Intertemporal equilibrium; instability; savings; capital |

Subjects: | D - Microeconomics > D9 - Intertemporal Choice > D90 - General D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D51 - Exchange and Production Economies C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C62 - Existence and Stability Conditions of Equilibrium |

Item ID: | 30823 |

Depositing User: | Sergio Parrinello |

Date Deposited: | 10 May 2011 15:19 |

Last Modified: | 28 Sep 2019 16:44 |

References: | Arrow, K. J. (1971) and Hahn, F. H. : General Competitive Analysis, San Francisco: Holden-Day/Edimburgh: Oliver & Boyd. Clower, R. W. (1969): The Keynesian counterrevolution: a theoretical appraisal in R.W. Clower (ed): Monetary Theory. Harmondsworth: Penguin, pp. 270-297. Fisher, F. (1983), Disequilibrium foundations of equilibrium economics, Econometric Society Publication no.6, Cambridge University Press. Garegnani, P. (2003): Savings, investment and capital in a system of general intertemporal equilibrium (with 2 appendices and a mathematical note by M. Tucci, in Petri and Hahn, 2003, pp.117-175. Earlier version in Kurz (2000), pp. 392-445. Hahn, F.H.(1982): The Neo-Ricardians, Cambridge Journal of Economics, 6, pp. 353-374. Kurz, H.D. (ed. 2000): Critical Essays on Sraffa’s Legacy in Economics. Cambridge: University Press. Schefold B. (2008), "Saving, Investment and Capital in a System of General Intertemporal Equilibrium - an Extended Comment on Garegnani with a Note on Parrinello", in G. Chiodi, L. Ditta (Eds), Sraffa or an Alternative Economics, Houndmills Basingstoke, Palgarve Macmillan. Schefold, B. (2005), "Reswitching as a Cause of Instability of Intertemporal Equilibrium", Metroeconomica”, Metroeconomica, 56: 438–476 Smale, S. (1976), “A convergent process of price adjustments and global Newton Methods”, Journal of Mathematical Economics, 3, pp. 1-14. |

URI: | https://mpra.ub.uni-muenchen.de/id/eprint/30823 |