Econometrica: Sep 1976, Volume 44, Issue 5
A Non-Tatonnement Model with Production and Consumption
Franklin M. FisherPrevious work on non-tatonnement processes has allowed only trading of titles to commodities or promises to produce to take place out of equilibrium. The present work allows production and consumption to take place. The basic model used is that of the Hahn Process, since the making of irreversible commitments in production and consumption seems especially suited to a model whose basic feature is the decline of target profits and utilities. The attempt to introduce production and consumption out of equilibrium brings to the fore a number of problems implicit in most stability analysis which must now be explicitly faced.
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