The Moving Equilibrium Theorem Again

Schlicht, Ekkehart (1997): The Moving Equilibrium Theorem Again. Electronic reprint with corrections. Discussion Papers in Economics 1997-51 Economic Modelling, 14

Abstract

The analysis of multivariate dynamical models can sometimes be considerably simplified by the assumption that one or several variables move infinitely fast to their equilibrium values. The method is known as the 'moving equilibrium method'. Various dynamical theories that build on equilibrated markets presuppose the validity of this method. The Moving Equilibrium Theorem states that such an analytic procedure leads to correct conclusions if the movement of the fast variables is indeed sufficiently fast. The purpose of this paper is to present a simple direct proof of the theorem for the linear case.

Abstract

UNSPECIFIED

• Item Type: Paper
• Form of publication: Postprint
• Keywords: Moving equilibrium, Dynamical systems, Temporary equilibrium
• Faculties: Economics > Munich Discussion Papers in Economics; Economics > Munich Discussion Papers in Economics > Micro-Economics; Economics > Munich Discussion Papers in Economics > Macro-Economics; Economics > Munich Discussion Papers in Economics > Mathematical Methods; Economics > Chairs > Chair of Institutional Economics (closed)
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: B41, C6
• Language: English

References

[Allen 1967] Allen, Roy George Douglas, Macro-economic theory - a mathematical treatment (New York: Macmillan, 1967).

[Arrow and Hahn 1971] Arrow, K. J. and F. H. Hahn, General competitive analysis (Edinburgh: Oliver & Boyd, 1971).

[Eckalbar 1985] John C. Eckalbar, "On the use and misuse of the instantaneous speed of adjustment assumption", Economic Modelling 2, 1 (1985), pp. 3 - 7.

[Hicks 1939] Hicks, Sir John Richard, Value and Capital - An Inquiry Into Some Fundamental Principles of Economic Theory (Oxford: Clarendon Press, 1939).

[Lindbeck 1976] Lindbeck, Assar, "Approaches to Exchange Rate Analysis-An Introduction", Scandinavian Journal of Economics 78, 2 (1976), pp. 133-45.

[Lotka 1957] Alfred J. Lotka, Elements of mathematical biology (New York: Dover, 1957). first published in 1925

[Marshall 1920] Alfred Marshall, Principles of Economics 8 (London: Macmillan, 1920). First edition 1890,

[Samuelson 1947] Samuelson, Paul Anthony, Foundations of economic analysis (Cambridge (MA): Harvard University Press, 1947).

[Schlicht 1978] Ekkehart Schlicht, "Die Methode der Gleichgewichtsbewegung als Approximationsverfahren", in Ernst Helmstädter, ed., Neuere Entwicklungen in den Wirtschaftswissenschaften (Berlin: Duncker & Humblot, 1978), pp. 293--305.

[Schlicht 1985] Schlicht, Ekkehart, Isolation and Aggregation in Economics (Berlin-Heidelberg-New York-Tokyo: Springer-Verlag, 1985).

[Schlicht 1990] Ekkehart Schlicht, "Local Aggregation in a Dynamic Setting", Journal of Economics 51, 3 (1990), pp. 287--305.

[Schlicht 1992] Ekkehart Schlicht, "Marshall, Keynes, and Macroeconomics", Quaderni di Storia dell'Economia Politica (1992), pp. 511--529.

[Schlicht 1997] Schlicht, Ekkehart, "The moving equilibrium theorem again", Economic Modelling 14, 2 (1997), pp. 271-278.