Existence and Stability of Equilibrium in a Multisectoral Model with Quantity Rationing

  • Marco Lehmann-Waffenschmidt
Conference paper


Sectorspecific measures, particularly for new high-tech firms, are currently of major concern to German economic policy. For an analysis of the effects of such sectorspecific policy measures in the framework of temporary equilibrium theory, however, the theorist misses a suitable model. On the one hand, the totally aggregated macromodel turns out to be too rough, and the totally disaggregated micromodels on the other hand turn out to be too complicated. It is the main purpose of this study to fill in this gap by providing a quantity constrained model on a medium-aggregated level. Our procedure will be to disaggregate the well-known quantity constrained macromodel into several sectors. Our model has the advantage that one can still make use of a two dimensional geometric representation. The paper then addresses the questions of existence and stability of general equilibrium. The existence problem can be reduced to an analytically simple situation. The stability issue will be settled by a natural extension of the familiar macro-quantity tâtonnement process to our multi-sectoral setting.


Labor Supply General Equilibrium Labor Demand Adjustment Process Reaction Function 
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.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Böhm, V. (1978): Disequilibrium Dynamics in a Simple Macroeconomic Model; Journal of Economic Theory, 17, 179–199.CrossRefGoogle Scholar
  2. Böhm, V. (1982): On the Uniqueness of Macroeconomic Equilibria with Quantity Rationing; Economic Letters, 10, 43–48.CrossRefGoogle Scholar
  3. Böhm, V. (1989): Disequilibrium and Macroeconomics. Basil Blackwell. Gabisch, G., and H.W. Lorenz (1989): Business Cycle Theory; 2nd revised edition; Lecture Notes in Economics and Mathematical Systems, Vol 283, Springer Verlag.Google Scholar
  4. Gabisch, G., and H.W. Lorenz (1989): Business Cycle Theory Lecture Notes in Economics and Mathematical Systems, Vol.283, Springer Verlag.Google Scholar
  5. Grandmont, J.-M. (1982): Temporary General Equilibrium Theory; Ch. 19 in “Handbook of Mathematical Economics”, VolII, ed. by F. Arrow and M.D. IntrUigator, North-HollandGoogle Scholar
  6. Hahn, F. (1982): Stability; Ch. 16 in “Handbook of Mathematical Economics”, Vol II, ed. by F. Arrow and M.D. Intriligator, North-Holland.Google Scholar
  7. Henn, R., Späth, L., Lübbe, H., and G. Krüger (1986): Employment and the Transfer of Technology; Springer Verlag.Google Scholar
  8. Henn, R., and M. Lehmann-Waffenschmidt (1987): Effects of Governmental Supportive Measures for High-Technology Firms on Employment and Growth in a Multi-Sectoral Quantity Rationing Model; (in German); in: “Technologietransfer; Wachstum und Beschäftigung”, Springer Verlag, 990–999.CrossRefGoogle Scholar
  9. Ito, T. (1980): Methods of Estimation for Multi-Market Disequilibrium Models; Econometrica, 1980, 97–125.CrossRefGoogle Scholar
  10. Lorenz, H.:W. (1989): Nonlinear Dynamical Economics and Chaotic Motion, Lecture Notes vol. 334, Springer VerlagGoogle Scholar
  11. Malinvaud, E. (1977): The Theory of Unemployment Reconsidered; Blackwell, Oxford.Google Scholar
  12. Meyer, U. (1983): Neue Makroökonomik; Springer Verlag Google Scholar
  13. Quandt, R.E. (): Bibliography of Quantity Rationing and Disequilibrium Models; Princeton University, six-monthly.Google Scholar

Copyright information

© Springer-Verlag Berlin · Heidelberg 1994

Authors and Affiliations

  • Marco Lehmann-Waffenschmidt
    • 1
  1. 1.Fakultät Wirtschaftswissenschaften Volkswirtschaftslehre, insbs. Managerial EconomicsTechnische Universität DresdenDresdenGermany

Personalised recommendations