Convergence to Long-Run Equilibrium - On some Recent Variations of the Pure Cross-Dual Model

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Abstract

In some recent works on the dynamics of capitalistic competition Duménil and Lévy proposed two ways to overcome the problem of instability of long-run equilibrium in cross-dual models of gravitation: in the first one a different notion of rate of profit, the "realised" rate of profit is supposed to drive capitalists' investment decisions; in the second one the goal is pursued by introducing a direct adjustment of output in response to imbalances between demand and supply. In the present paper we argue that both these procedures rise a logical problem, concerning capitalists' behaviour and their information set, and we present a re-formulation of the model that avoids it.
Original languageEnglish
Pages (from-to)225-237
Number of pages13
JournalStructural Change and Economic Dynamics
Volume10
Publication statusPublished - 1999

Keywords

  • Capitalistic competition
  • gravitation
  • long-run equilibrium
  • market prices
  • natural prices

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