The Moving Equilibrium Theorem Again

by Ekkehart Schlicht

Economic Modelling 14, 1997, 271-278.

Abstract

Many dynamic economic models presuppose that one or several variables of a multivariate model move infinitely fast to their equilibrium values. In this way, the analysis of dynamical models can be simplified. The method is known as the 'moving equilibrium method'. Various dynamical theories that build on equilibrated markets presuppose the validity of the method. The Moving Equilibrium Theorem states that such an analytic procedure leads to correct conclusions if the movement of the fast variables is indeed sufficiently fast.
The purpose of this paper is to present a simple direct proof of the theorem for the linear case.

Keywords: Moving equilibrium, dynamical systems, temporary equilibrium, aggregation

download page



Professor Dr. Ekkehart Schlicht: Veröffentlichungen/Publications
 

||||||||