1992•RePEc: Research Papers in EconomicsRequires access
Stable Disequilibrium Prices
Geoffrey Heal
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Abstract
Abstract In an economy with non-convex production possibility sets the Walrasian adjustment process is well-defined. Under appropriate conditions it is globally stable with a limit which is not a competitive equilibrium and is a non-market-clearing price. This limit is the competitive equilibrium price vector of the economy obtained by convexification of the production sets.