Author(s): Kemp-Benedict, E.
In: arXiv:1108.0188v3 [q-fin.GN], revised 24 Aug 2011
Type: Working paper
Link to SEI author(s):
The economic theory of General Equilibrium predicts that instability should be is 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 behavior that reduces the size of fluctuations.
Second-Order, Dissipative Tâtonnement: Economic Interpretation and 2-Point Limit Cycles
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