Interest, profit and saving in Arrow-Debreu equilibrium models
Saverio Maria Fratini
Abstract
Saverio Maria Fratini
Abstract
The paper aims to point out that the concepts of interest, profit and saving that we come across in the Arrow-Debreu equilibrium models are significantly different from what is usually indicated by these same terms in economic analysis. In fact, in the Arrow-Debreu models, they are not related to the investment of capital. As we shall try to show, the difficulties that the Arrow-Debreu theory encounters with reference to capital and related concepts derive from the hypothesis of markets open in a single moment that characterizes these models.
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The paper aims to point out that the concepts of interest, profit and saving that we come across in the Arrow-Debreu equilibrium models are significantly different from what is usually indicated by these same terms in economic analysis. In fact, in the Arrow-Debreu models, they are not related to the investment of capital. As we shall try to show, the difficulties that the Arrow-Debreu theory encounters with reference to capital and related concepts derive from the hypothesis of markets open in a single moment that characterizes these models.
Key concepts: Economics, Arrow, Mathematical economics, Rate of profit, General equilibrium theory, Profit (economics), Microeconomics, Computer science