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| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Testable implications of general equilibrium theory: A differentiable approach |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Mathematical Economics |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0304-4068 |
| Volume | 40 |
| Number | 1-2 |
| Page Range | 105 - 119 |
| Date | 2004 |
| Abstract Text | Is general equilibrium theory empirically testable? Our perspective on this question differs fromthe standard, Sonnenschein–Debreu–Mantel (SDM) viewpoint. While the SDM tradition considersaggregate (excess) demand as a function of prices, we suppose that what is observable is the equilibriumprice vector as a function of the fundamentals of the economy.We apply this perspective to anexchange economy where equilibrium prices and individual endowments are observable.We derivenecessary and sufficient conditions that characterize the equilibrium prices, as functions of initialendowments. Furthermore, we show that, if these conditions are satisfied, then the economy cangenerically be identified. Finally, we show that when only aggregate data are available, observablerestrictions vanish.We conclude that the availability of individual data is essential for the derivationof testable consequences of the general equilibrium construct. |
| Official URL | http://www.sciencedirect.com/science/article/pii/S0304406803001150 |
| Digital Object Identifier | 10.1016/j.jmateco.2003.11.002 |
| Other Identification Number | merlin-id:6962 |
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