Description
Book SynopsisThis book presents general equilibrium theory for advanced undergraduate and graduate-level economics students. It discusses economic efficiency, competitive equilibrium, the welfare theorems, the Kuhn-Tucker approach to general equilibrium, the Arrow-Debreu model, and rational expectations equilibrium and the permanent income hypothesis.
Table of Contents* Acknowledgments 1. Why Study General Equilibrium? 2. The General Equilibrium Model * Commodities * Allocations * Utility Functions * Economies 3. Economic Efficiency * Definition of Pareto Optimality * Existence of Pareto Optimal Allocations; The Bolzano-Weierstrass Theorem * The Utility Possibility Frontier * The Calculation of Pareto Optima; Homogeneous Functions * Pareto Optimality and Optimality: Minkowski's Separation Theorem * The Structure of the Utility Possibility Frontier * Compactness of the Set of Feasible Allocations * Problem Set 4. Competitive Equilibrium * The Definition of Competitive Equilibrium * Properties of Market Excess Demand and Equilibrium * Offer Curves * Equilibrium with Constant Returns to Scale * Computation of Competitive Equilibrium in Simple Examples * Aggregate Input-Output Possibility Sets * An Incomplete Theorem on the Existence of Equilibrium * A Complete Theorem on the Existence of Equilibrium * An Example of Discontinuous Behavior of Equilibria * Problem Set 5. The Welfare Theorems * The FirstWelfare Theorem * The SecondWelfare Theorem * Another Complete Theorem on the Existence of Equilibrium * Problem Set 6. The Kuhn-Tucker Approach to General Equilibrium Theory * Kuhn-Tucker Theorem * Kuhn-Tucker Coefficients * The Kuhn-Tucker Interpretation of Competitive Equilibrium * The Differentiable Case * Proof of the Kuhn-Tucker Theorem * Problem Set 7. Arrow-Debreu Equilibrium * The Arrow-Debreu Model * Arrow Equilibrium * Insurance * Incomplete Markets and the Definition of Profit Maximization * Problem Set 8. Rational Expectations Equilibrium and the Permanent Income Hypothesis * The Permanent Income Hypothesis * Rational Expectations Equilibrium * Short-Run Equilibrium * Consumer Surplus * The Stability of Short-Run Equilibrium * Problem Set 9. Samuelson's Overlapping Generations Model * Overlapping Generations with a Finite Time Horizon * Inefficiency with an Infinite Horizon * Pareto Optimal Equilibria * Stationary Discounted Optima and Equilibria * Nonuniqueness of Equilibrium * Discounted Optimality and Equilibrium * Undiscounted Optimality and Equilibrium * Uniqueness of Optimal Allocations * Existence of Optimal Allocations * Problem Set 10. The One-Sector Growth and Diamond Overlapping Generations Models * The One-Sector Diamond and Optimal Growth Models * Inefficiency * Pareto Optimal Equilibria * Stationary Discounted Optima and Equilibria * Social Security * Population Growth * Discounted Optimal and Equilibrium Allocations * Discounted Optimal and Equilibrium Programs * Program Efficiency and the Hahn Problem * Euler's Equation * Policy Functions and the Value Function * The Turnpike Theorem * Equilibrium, Optimality, and the Turnpike Theorem in the Undiscounted Case * Existence of Optimal Allocations and Programs * Problem Set 11. A Critical Assessment * References * Index
