Skip to main content
SpringerLink
Log in

Dynamic adjustment of supply under Buyers' forced substitution

  • Articles
  • Published:
Zeitschrift für Nationalökonomie Aims and scope Submit manuscript

Abstract

This paper presents a dynamic version of the static model analysed in Chapter 8 of Kornai (1980). A multi-commodity model is considered, where global excess supply prevails but excess demand persists for certain goods. It is assumed that the goods are storable, and the buyer purchases more than his demand fornon-shortage goods (he makes forced substitution) to satisfy his global demand.

This paper investigates the seller's adjustment process and presents alternative assumptions for the supply, the demand, and the allocation rule under which the shortage disappears in a finite period of time.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • R. J. Barro and H. I. Grossmann (1971): A General Disequilibrium Model of Income and Employment, American Economic Review61, pp. 82–93.

    Google Scholar 

  • J.-P. Benassy (1982): The Economics of Market Disequilibrium, New York.

  • S. Honkapohja and T. Ito (1982): Inventory Dynamics in a Simple Disequilibrium Macroeconomic Model, Scandinavian Journal of Economics84, pp. 184–198.

    Google Scholar 

  • J. Kornai (1980): The Economics of Shortage, Amsterdam.

  • J. Kornai and A. Simonovits (1977): A Piaci Modell (model of the market), manuscript, Budapest, Institute of Economics.

    Google Scholar 

  • J. Kornai and J. W. Weibull (1978): The Normal State in a Shortage Economy: A Queue Model, Scandinavian Journal of Economics80, pp. 375–398.

    Google Scholar 

  • P. A. Samuelson (1947): Foundations of Economic Analysis, Cambridge, Mass.

Download references

Author information

Author notes

  1. A. Simonovits

    Present address: Közgazdaságtudományi Intézete, Magyar Tudományos Akadémia, Postafiók 262, 1502, Budapest, Hungary

Authors and Affiliations

    Authors
    1. A. Simonovits
      View author publications

      You can also search for this author in PubMed Google Scholar

    Additional information

    My indebtedness to J. Kornai is multi-sided: it was he, who formalized the theory: it was he, who created the underlying static model, finally the idea of the dynamic analysis is also due to him. I express my obligations to J. Kornai, B. Martos and an anonymous referee for their comments on an earlier version of my paper. Of course, I am alone responsible for any shortcomings of the model.

    Rights and permissions

    Reprints and permissions

    About this article

    Cite this article

    Simonovits, A. Dynamic adjustment of supply under Buyers' forced substitution. Zeitschr. f. Nationalökonomie 45, 357–372 (1985). https://doi.org/10.1007/BF01355511

    Download citation

    • Received:

    • Revised:

    • Issue Date:

    • DOI: https://doi.org/10.1007/BF01355511

    Keywords

    Search

    Navigation