Continua of underemployment equilibria reflecting coordination failures, also at Walrasian prices
Alessandro Citanna
(1)
,
Hervé Crès
,
Jacques Drèze
(2)
,
Jean-Jacques Herings
(2)
,
Antonio Villanacci
(3)
Résumé
In this paper, the existence of unemployment is partly explained as being the result of coordination failures. It is shown that as a result of self-fulfilling pessimistic expectations, even at Walrasian prices, a continuum of equilibria results, among which an equilibrium with approximately no trade and a Walrasian equilibrium. These coordination failures also arise at other price systems, but then unemployment is the result of both a wrong price system and coordination failures. Some properties of the set of equilibria are analyzed. Generically, there exists a continuum of non-indifferent equilibrium allocations. Under a condition implied by gross substitutability, there exists a continuum of equilibrium allocations in the neighborhood of a competitive allocation, when prices are Walrasian. For a specialized economy, a dynamic illustration is offered.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Continua of underemployment equilibria reflecting coordination failures, also at Walrasian prices
|
Résumé |
en
In this paper, the existence of unemployment is partly explained as being the result of coordination failures. It is shown that as a result of self-fulfilling pessimistic expectations, even at Walrasian prices, a continuum of equilibria results, among which an equilibrium with approximately no trade and a Walrasian equilibrium. These coordination failures also arise at other price systems, but then unemployment is the result of both a wrong price system and coordination failures. Some properties of the set of equilibria are analyzed. Generically, there exists a continuum of non-indifferent equilibrium allocations. Under a condition implied by gross substitutability, there exists a continuum of equilibrium allocations in the neighborhood of a competitive allocation, when prices are Walrasian. For a specialized economy, a dynamic illustration is offered.
|
Auteur(s) |
Alessandro Citanna
1
, Hervé Crès
, Jacques Drèze
2
, Jean-Jacques Herings
2
, Antonio Villanacci
3
1
GREGH -
Groupement de Recherche et d'Etudes en Gestion à HEC
( 1738 )
- 1, avenue de la Libération 78351 JOUY EN JOSAS CEDEX
- France
2
CORE -
Center of Operation Research and Econometrics [Louvain]
( 48233 )
- 34, Voie du Roman Pays B-1348 Louvain-la-Neuve
- Belgique
3
UniFI -
Università degli Studi di Firenze = University of Florence = Université de Florence
( 148408 )
- Piazza di San Marco, 4, 50121 Firenze FI, Italie
- Italie
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Non spécifiée
|
Date de publication |
2001-12
|
Volume |
36
|
Numéro |
3
|
Page/Identifiant |
169 - 200
|
Domaine(s) |
|
Mots-clés (JEL) |
|
Référence interne |
|
Spire (Sciences Po) | 2441/10268 |
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