Differential Topology and General Equilibrium with Complete and Incomplete Markets
By: by Antonio Villanacci, Laura Carosi, Pierluigi Benevieri, Andrea Battinelli
Contributors: Carosi, Laura; Benevieri, Pierluigi; Battinelli, Andrea
Publisher: Springer US
Published: 2002
Place of publication: Boston, MA
Language: eng
Format: [electronic resource] /
Number of pages: 473
ISBN-13: 9781441953063; 9781475736199
Subjects: Microeconomics; Economics; Global analysis
Description: The goal of this publication is to provide basic tools of differential topology to study systems of nonlinear equations, and to apply them to the analysis of general equilibrium models with complete and incomplete markets. The main content of general equilibrium analysis is to study existence, (local) uniqueness and efficiency of equilibria. To study existence Differential Topology and General Equilibrium with Complete and Incomplete Markets combines two features. As a first step, first order conditions (of agents' maximization problems) and market clearing conditions, instead of aggregate excess demand functions, are used. As a second step, a homotopy argument, stated and proved in relatively elementary manner, is applied to that "extended systemof equations. Local uniqueness and smooth dependence of the endogenous variables from the exogenous ones are studied using a version of a so called parametric transversality theorem.
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