EXISTENCEamp;STABILITY - Universit#224; degli Studi di Siena存在amp；稳定的大学和# 224；锡耶纳的研究.docVIP

CHAPter 6. Existence, uniqueness and stability OF the GENERAL equilibrium OF pure EXCHANGE, and of acapitalistic production and exchange. The exchange economy: existence of equilibrium 6.1. The supply-and-demand approach to value and distribution argues that the competitive interaction of buyers and sellers pushes a market economy toward a situation of equality, or equilibrium, between supply and demand simultaneously on all markets. The theory must then show (i) that such a situation of general equilibrium exists, (ii) that the economy tends to it. This chapter presents and assesses the main results reached on these issues by the theory of general equilibrium for the pure exchange economy and for the ‘atemporal’ production economy without capital. In the next three chapters we will discuss the complications due to the presence of capital goods and of interest rates. In so doing we follow the usual sequence in the presentations of the neoclassical approach, the one adopted for example by Walras and by Wicksell. The traditional motivation of such a sequence is that the basic insights reached by considering the pure-exchange economy are not falsified by the successively added complications. We will find reasons to doubt such a thesis. The first part of the present chapter discusses the existence of solutions to the equations defining the general competitive equilibrium of an exchange economy(). We have met the exchange economy at the end of Ch. 4. We remember its constituents. The economy consists of a finite number of consumers, indexed 1,..,h,..,H, each one with given preferences and a given n-vector of endowments ωh=(ω1h,...,ωnh). Consumers are price-takers and, given a vector of prices p, for each consumer utility maximization determines a set dh(p) of consumption bundles that maximize her utility under the budget constraint, a set that may contain one element, or a finite or infinite number of elements. Any one of the elements in dh(p) can be() a vector of