Equilibrium, Stability, and Growth: A Multi-Sectoral Analysis

Equilibrium, Stability, and Growth: A Multi-Sectoral Analysis

Equilibrium, Stability, and Growth: A Multi-Sectoral Analysis

Equilibrium, Stability, and Growth: A Multi-Sectoral Analysis

Excerpt

This book brings together my recent papers published in several journals. They have been revised in various places and contain some new material. The main model carried through the whole book is Professor Leontief's input-output system; and it is dynamized from various points of view.

Chapter I discusses formal similarities between the exchange equilibrium under weak gross substitutability and the static input-output system. By algebraic operations only (no infinite processes being used) it is seen that the Hicksian laws of comparative statics and the LeChatelier-Samuelson principle hold in both systems.

Chapter II is concerned with the stability of the mixed Walras-Leontief system, to which I apply the conventional analysis of stability of equilibrium. The use of this method may be justified by the Walrasian device of tâtonnement, or by making the assumptions that consumption goods and raw materials are perishable and not used more than once, and that capital goods are not subject to purchase and sale, only their services being traded on the market. There does not occur any redistribution of durable goods among individuals throughout the whole process of trading and pricing. On the other hand, Note to Chapter II shows that a pure exchange equilibrium is stable under some fairly reasonable assumptions, even if transactions of durable goods and, therefore, redistributions of the stocks of goods take place in the midst of pricing. In Chapter II , I also explore the laws of comparative statics which can be established for the Walras-Leontief system.

Chapters III and IV are companion chapters dealing with a mixture of the dynamic Leontief system and the Walrasian model of capital formation. They, however, assume different types of production functions: neo-classical production functions or discrete 'activities'. They discuss various effects of technological improvements and correlations among prices, wages,

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