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| Francesco Ruscitti and Ram Sewak Dubey |
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| ''Monotone comparative statics in general equilibrium'' |
| ( 2016, Vol. 36 No.1 ) |
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| Under certain conditions on the excess demand function, it is shown that the set of equilibrium prices coincides with the set of maximizers of a potential function.
Therefore, monotone comparative statics techniques can be employed to study how equilibrium prices change when there are shocks to the parameters of the model.
As a by-product of our analysis, it turns out that the set of equilibrium prices is a convex lattice. |
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| Keywords: Monotone comparative statics, Potential function, Supermodularity, Walrasian equilibrium, Weak gross substitution property |
JEL: D5 - General Equilibrium and Disequilibrium: General
C6 - Mathematical Methods and Programming: General |
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| Manuscript Received : Sep 13 2015 | | Manuscript Accepted : Feb 11 2016 |
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