ABSTRACT OF PAPER
Title: Generalizing general equilibrium: from Arrow to Malinvaud
Author:
In the early to mid 1970s, there developed a large literature concerned with general equilibrium models in which prices were fixed and, as a result, markets did not clear and agents faced constraints on what they could buy and sell. The result was equilibrium with rationing. This paper considers the origins of that literature, tracing it back through the work of Takashi Negishi, Frank Hahn and Kenneth Arrow to the time when the Arrow-Debreu model was first formulated in the early 1950s. Though this literature came to be seen as part of the attempt to provide microfoundations for Keynesian macroeconomics, and was indeed aimed at doing this, its origins lie deeper, in questions that arose within general equilibrium analysis itself.
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