Static and dynamic aspects of general disequilibrium theory (Q4366803)

The core of mathematical economics is general equilibrium theory. The reviewed monograph describes and analyses various general equilibrium models, treating the theory from an axiomatic point of view. The monograph consists of four parts, each of which is self-contained. Part I deals with mathematical and economic preliminaries and contains an overview of the mathematical notions and results needed later on, such as topology, vector spaces, relations and correspondences, fixed point theorems, measure theory etc. The well-known equilibrium models of the economic system and their basic ingredients (agents, commodities, producers, consumers, value) are described. Carefully defined, the set of admissible actions objectives and resources of each agent leads to the Arrow-Debreu model and to the Walrasian equilibrium concept, which is rigorously formulated. An overview of the various assumptions, extensions and properties of these and related notions are discussed. Finally, it is shown that there is a considerable class of economic models for which the Walrasian tatonnement process is not stable and one cannot be too confident that a Walrasian equilibrium price system is reached. The analysis of the static aspects of disequilibrium theory is performed in Part II. A general equilibrium model is developed for the case that price rigidities are present. It is possible that no Walrasian equilibrium belongs to the set of admissible price systems in this case. It is shown in this chapter that in a general equilibrium model allowing for price rigidities there exists a connected set of corresponding constrained equilibria, an algorithm to compute approximate constrained equilibria is proposed for the case when the total excess demand correspondence is upper hemi-continuous and some other results are presented. Papt III determines price rigidities endogenously. The two chapters of this part assume that there exists a numeraire commodity and focus the attention on Dreze equilibria with respect to the related market. Finally, Part IV deals with dynamical aspects of disequilibrium theory. In particular, a globally stable price adjustment process is considered. This process has an appealing economic interpretation and converges to a Walrasian equilibrium price system under standard assumptions on utility functions, consumption sets and initial endowments.