World Conference Econometric Society, 2000, Seattle

John H. Nachbar, Washington University |

General Equilibrium Comparative Statics |

Session: C-11-7 Tuesday 15 August 2000 by Nachbar, John H. |

A standard conjecture for competitive exchange economies is that if the endowment of some good L increases, all other endowments remaining fixed, then the equilibrium relative price of good L decreases. This paper shows that a generalized version of this conjecture is correct if, and essentially only if, at the reference equilibrium, (a) the general equilibrium version of the Law of Demand holds and (b) goods are normal. |

File created by Jurgen Doornik with eswc2000.ox on 2-01-2001