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SEI working paper

Second-Order, Dissipative Tâtonnement: Economic Interpretation and 2-Point Limit Cycles

Eric Kemp-Benedict / Published on 2 August 2011
Citation

Kemp-Benedict, E. (2011). Second-Order, Dissipative Tâtonnement: Economic Interpretation and 2-Point Limit Cycles. arXiv:1108.0188v3 [q-fin.GN], revised 24 Aug 2011.

Computer with charts on it

The economic theory of General Equilibrium predicts that instability should be a common feature of economies. There is, indeed, instability in economic life, but perhaps not as much as theory suggests. This paper proposes a price-adjustment mechanism with “damping” due to seller behaviour that reduces the size of fluctuations.

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SEI author

Eric Kemp-Benedict
Eric Kemp-Benedict

SEI Affiliated Researcher

SEI US

Tags
economics
Related centres
SEI US