Econometrica: Mar 1980, Volume 48, Issue 2

The Stability of Non-Walrasian Processes: Two Examples

https://doi.org/0012-9682(198003)48:2<371:TSONPT>2.0.CO;2-Y
p. 371-386

John C. Eckalbar

As a non-Walrasian system tracks through the phase space, the differential equations which govern its motion will typically change as the system crosses certain borders. This increases the complexity of the stability problem considerably. In the present paper we find that some straightforward modifications to Lyapunov's method render the problem tractable. These methods are derived, and their use is illustrated in the case of two different systems which have trading out of equilibrium.

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