Pierangelo Garegnani has argued that the value capital endowment could have been avoided in Knut Wicksell’s long-period general equilibrium in Value Capital and Rent (1898); the capital endowment might have been specified as an amount of labour embodied in the economy’s stock of capital...

Can monetary or fiscal policy stabilize expectations in a liquidity trap? We study expectation formation near the zero lower bound using a learning-to-forecast laboratory experiment. Monetary policy targets inflation around a constant or state-dependent target. Subjects’ expectations...

In this paper we study the welfare effect of a monopoly innovation. Unlike many partial equilibrium models carried out in previous studies, general equilibrium models with non-price-taking behavior are constructed and analyzed in greater detail. We discover that technical innovation carried out...

In an exchange economy, we provide a discrete exchange process, which is Walrasian since the trades are given by the equilibrium allocation of the local equilibrium. We prove that this process attains a Pareto optimal allocation after a finite number of steps and the local equilibrium price then...

I discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations. I argue that economic theory plays (should play) a central role in formulating models, estimates of which can be used for...

We state conditions for existence and uniqueness of equilibria in evolu- tionary models with an infinity of locally and globally interacting agents. Agents face repeated discrete choice problems. Their utility depends on the actions of some designated neighbors and the average choice throughout...

The static and dynamic market disequilibrium are presented as follows: the Edgeworth box is discussed in order to demonstrate the advantage of the role of negotiations on the market to the tatonnament role in the Walrasian static equilibrium model. In this context the equilibrium method devised...

This paper shows that the inverse image of the natural projection defines a ramified covering with finite layers. Finiteness of equilibria for regular two period production economies with uncertainty follows from this property.

We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive benefits from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains in...

In this paper, we use a series of simple examples to illustrate how wealth-driven selection works in a market for Arrow securities. Our analysis delivers both a good and a bad message. The good message is that, when traders invest constant fractions of their wealth in each asset and have equal...