By Alessandro Citanna, John Donaldson, H. Polemarchakis, Paolo Siconolfi, Stephen Spear

ISBN-10: 3540222677

ISBN-13: 9783540222675

Within the region of dynamic economics, David Cass’s paintings has spawned a few very important strains of analysis, together with the examine of dynamic normal equilibrium concept, the concept that of sunspot equilibria, and common equilibrium concept while markets are incomplete. in response to those contributions, this quantity includes new advancements within the box, written by way of Cass's scholars and co-authors.

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Extra resources for Essays in Dynamic General Equilibrium Theory: Festschrift for David Cass (Studies in Economic Theory)

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Sometimes they are defined by ‘average’ unit costs that decrease with production. e. cient, in utilizing its resources as is typical to firms with large fixed costs such as aerospace, airlines, and oil refineries8 . In contrast, increasing returns to scale are external to the firm when the increased productivity comes about as a result of decreasing unit costs at the level of the industry as a whole. In the latter case, each firm could have constant unit costs as its production increases, and behave competitively9 .

N∆ = T . All flow variables in the economy ( (t), c(t), f (t) and π(t)) are now interpreted as “flows over the interval t to t + ∆”. We then take the limit as n → ∞ (∆ → 0). Proposition 5 reports the resulting optimality conditions and equilibrium characterization for the competitive, monopolistic pre-commitment and monopolistic time-consistent economies, assuming appropriate regularity conditions are satisfied. Proposition 5. In the continuous-time limit, as n → ∞, ∀t: (i) The competitive firm’s optimal labor demand f( D D (t), ε(t)) − w(t) = 0.

Ciency in a finite time if and only if the W P dw {w has no positive root. polynomial D({) = w=0 Proof. cients of the polynomial D({). cients, as in (3). Up to now we have proceeded to a finite number of successive changes. A justification of the hypothesis is that, if there were infinitely many nonzero values of |w , |w might tend to infinity and the marginal approximation would hold no longer. However, the objection is avoided if we restrict the attention to uniformly bounded sequences {|}. ciency in a finite time, but it does so in an infinite time, by repeating the operation for 38 Christian Bidard all dates at the same activity levels.

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Essays in Dynamic General Equilibrium Theory: Festschrift for David Cass (Studies in Economic Theory) by Alessandro Citanna, John Donaldson, H. Polemarchakis, Paolo Siconolfi, Stephen Spear


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