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A Model of General Economic Equilibrium

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Abstract

The subject of this paper is the solution of a typical economic equation system. The system has the following properties:

  1. (1)

    Goods are produced not only from “ natural factors of production,” but in the first place from each other. These processes of production may be circular, i.e. good G1 is produced with the aid of good G2, and G2 with the aid of G1.

  2. (2)

    There may be more technically possible processes of production than goods and for this reason “ counting of equations ” is of no avail. The problem is rather to establish which processes will actually be used and which not (being “ unprofitable”).

Keywords

  • Saddle Point
  • Capital Good
  • Usual Counting
  • Interest Factor
  • Free Good

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This paper was first published in German, under the title Über ein Ökonomisches Gleichungssystem and eine Verallgemeinerung des Brouwerschen Fixpunktsatzes in the volume entitled Ergebnisse eines Mathematischen Seminars, edited by K. Menger (Vienna, 1938). It was translated into English by G. Morgenstern. A commentary note on this article, by A. G. Champernowne, is printed below.

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© 1971 Economic Study Society

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Von Neumann, J. (1971). A Model of General Economic Equilibrium. In: Hahn, F.H. (eds) Readings in the Theory of Growth. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-15430-2_1

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