Dynamical systems in Walrusian general equilibrium

Abstract

The role of dynamical systems in general equilibrium analysis is chronicled. Starting with the introduction of a suitable phase space and evolution model, fundamental existence and stability results are proved. From here, many negative statements regarding the convergence of the price mechanism and attempts to rectify these conclusions are examined. The conclusion is that either the traditional economic hypotheses behind the model need to be reexamined or the economist’s dream of a universal pricing mechanism must be abandoned.