"A Dynamic General Equilibrium Model with Centralized Auction Markets"
A conventional wisdom in economics is that a model dealing frictionless markets with a large number of agents always yields a Walrasian outcome. In this paper we assess the above argument in a dynamic framework by modeling centralized auction markets, and show that in such markets the outcomes are not necessarily Walrasian; the set of stationary equilibria in our model is a continuum which includes the Walrasian equilibrium. Moreover, we also buildamodelondecentralized auction markets and obtain similar results.
Year of publication: |
2006-04
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Authors: | Kamiya, Kazuya ; Shimizu, Takashi |
Institutions: | Center for International Research on the Japanese Economy (CIRJE), Faculty of Economics |
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