By Pawel Sembrat
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Additional info for Model Detail Photo Monograph No. 18 - Gaz-69AM
Y > P "f(i). Finally, a balanced net trade competitive in X is an equilibrium in X. We shall not mention X whenever X = RD. ° 3. e. a set of new agents and a set of actions allowed for new and old agents. For each such economy with a market institution we can define equilibrium concepts. If no new agents are introduced, but we allow the set of all agents to reallocate any way they want, the set of optimal net trades is a natural set of equilibria. If we allow all subsets to reallocate the core is a natural set of equilibria.
But general equilibrium can be shown to exist for a far wider class of economies including those involving very general schemes of income redistribution via programs of taxation and subsidy and the like. We represent these ideas as follows. 1) n(p) = maxpy yeY (Our assumption on Y will guarantee the existence of this maximum). We now postulate the existence of n real valued functions IX; on ,1, where D. GALE AND A. 2) L (Xj(p) j=l = n(p) for all p in A. The Arrow-Debreu model corresponds to choosing the function (Xj in a particular manner.
Patinkin's quantity theory of money [52J differs from the classical theory in the dynamics postulated: Patinkin describes a tatonnement response to monetary disturbances yielding, under rather restrictive assumptions, a neutral effect of changes in the quantity of money even with respect to the short-run-equilibrium price structure (see also [15 J). The 'flexibility' [30, pp. e. the high degree of reversibility of the portfolio decision, which marks the holding of wealth in the form of money balances - what is also called the 'liquidity' [32; 33J of money - is due to its medium-of-exchange character.