[经济学]人大中级微观经济学讲义 Exchange.pptVIP

Trade in Competitive Markets At the new prices p1 and p2 both markets clear; there is a general equilibrium. Question 1: Are prices p1 and p2 determined independently at equilibrium? Question 2: Does the equilibrium exist? Walras’ Law (瓦尔拉斯法则) Walras’ Law is an identity; i.e. a statement that is true for any positive prices (p1,p2), whether these are equilibrium prices or not. 1834-1910 Walras’ Law Every consumer’s preferences are well-behaved so, for any positive prices (p1,p2), each consumer spends all of his budget. For consumer A:For consumer B: Walras’ Law Summing gives Walras’ Law Rearranged, That is, ... Walras’ Law This says that the summed marketvalue of excess demands is zero for any positive prices p1 and p2 -- this is Walras’ Law. Implications of Walras’ Law Suppose the market for commodity A is in equilibrium; that is, Then implies Implications of Walras’ Law So one implication of Walras’ Law for a two-commodity exchange economy is that if one market is in equilibrium then the other market must also be in equilibrium. In general, if there are k markets, then only k-1 prices are determined at equilibrium. I.e., the general equilibrium determines only relative prices. Implications of Walras’ Law What if, for some positive prices p1 and p2, there is an excess quantity supplied of commodity 1? That is, Then implies Implications of Walras’ Law So a second implication of Walras’ Law for a two-commodity exchange economy is that an excess supply in one market implies an excess demand in the other market. Solve for General Equilibrium Individual optimization problem Xi=Xi (P1,P2,Mi), i=1,2 Mi=Mi (P1,P2,?Xi , ?Yi) Xi=Xi (P1,P2 ) Market clearing for market X: X1 (P1,P2)+ X2 (P1,P2) = ?X1 + ?X2 Can solve for equilibrium P1/P2 Can solve for demand at equilibrium Existence of Equilibrium Require that the aggregate excess demand functions be a continuous function, which in turn require that Each individual’s demand function be continuous, or Each consumer is s