We show that production economies are tatonnement stable if consumers satisfy the weak axiom of revealed preference. To ensure that producer supply decisions are well defined, we restrict prices in the tatonnement so that positive profits cannot occur but do allow supply decisions to be...

It is generally recognized that the paradoxes of capital, of which reswitching is the most striking example, are a reason to question the existence of aggregate production functions. It is here shown that they affect intertemporal general equilibrium as well as causes of instabilities