Book contents
- Frontmatter
- Contents
- Preface
- Acknowledgments for reprinted articles
- PART I General introduction
- PART II Economies with a single maximand
- PART III Economies with multiple objectives
- 1 Stability of competitive-equilibrium
- 2 Competitive stability under weak gross substitutability
- 3 Stability in oligopoly
- 4 Studies in local stability
- 5 Dynamic shortages
- 6 Foundations of price dynamics
- PART IV General characterizations of allocation processes
- Appendix: An optimality criterion for decision-making under ignorance
- Author index
- Subject index
- Index of examples
1 - Stability of competitive-equilibrium
Published online by Cambridge University Press: 04 April 2011
- Frontmatter
- Contents
- Preface
- Acknowledgments for reprinted articles
- PART I General introduction
- PART II Economies with a single maximand
- PART III Economies with multiple objectives
- 1 Stability of competitive-equilibrium
- 2 Competitive stability under weak gross substitutability
- 3 Stability in oligopoly
- 4 Studies in local stability
- 5 Dynamic shortages
- 6 Foundations of price dynamics
- PART IV General characterizations of allocation processes
- Appendix: An optimality criterion for decision-making under ignorance
- Author index
- Subject index
- Index of examples
Summary
Introduction
A great deal of work has been done recently on what one may call the static aspects of competitive equilibrium, its existence, uniqueness, and optimality. This work is characterized, in the main, by being based on models whose assumptions are formulated in terms of certain properties of the individual economic units, although in the last analysis it is the nature of the aggregate excess demand functions that determines the properties of equilibria.
With regard to dynamics, especially the stability of equilibrium, much remains to be done. The concept of stability, used already by the nineteenth century economists in its modern sense, did not receive systematic treatment in the context of economic dynamics until Samuelson's paper of 1941. Samuelson, however, did not fully explore the implications of the assumptions underlying the perfectly competitive model. He (as well as Lange, Metzler, and Morishima) focused attention on the relationship between “true dynamic stability” and the concept of “stability” as defined by Hicks in Value and Capital, rather than on whether under a given set of assumptions stability (in either sense) would prevail or not. Even though the Hicksian concept does not, in general, coincide with that of “true dynamic stability,” it is of considerable interest to us for two reasons: first, as shown by the writers just cited, there are situations where the two concepts are equivalent; second, because the equilibrium whose “stability” Hicks studied is indeed competitive equilibrium.
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- Information
- Studies in Resource Allocation Processes , pp. 199 - 264Publisher: Cambridge University PressPrint publication year: 1977