Analysis of a dynamic, decentralized exchange economy

Ennio Stacchetti

    Research output: Contribution to journalArticlepeer-review

    Abstract

    A model of a dynamic exchange economy is presented. Similarly to the Walrasian equilibrium problem, each consumer is characterized by a feasible set and by an instantaneous demand function, that depends on the price vector, time, and the commodity holding. The commodity holding of each consumer varies, at each moment, according to this instantaneous demand function. We show that the market can choose prices that keep the commodity holding of each consumer within his consumption set, while ensuring that the aggregate commodity holding satisfies the scarcity constraints of the market.

    Original languageEnglish (US)
    Pages (from-to)241-259
    Number of pages19
    JournalJournal of Mathematical Economics
    Volume14
    Issue number3
    DOIs
    StatePublished - 1985

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Applied Mathematics

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