Abstract
There are three problems, as Arrow [1967] pointed out, that the general equilibrium theory has not succeeded in dealing with effectively, i.e., the failures (1) to provide the integration of Walrasian microeconomics and Keynesian macroeconomics, (2) to incorporate imperfect competition properly and (3) to take account of the cost of making transactions. These three problems are, in our opinion, not independent but mutually related. Following the suggestion of Arrow [1959], we have already considered the problems (1) and (2) elsewhere.1) The aim of this note is, therefore, to consider problems (1) and (3), i.e. the possibility of non-Walrasian, hopefully Keynesian, unemployment equilibrium due to the introduction of marketing costs into the Walrasian model of perfect competition.
This work was supported in part by National Science Foundation grant SOC74-11446 at the Institute for Mathematical Studies in the Social Sciences at Stanford University, and in part by the Japan Economic Research Foundation and the Tokyo Center for Economic Research.
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© 1977 Springer-Verlag Berlin Heidelberg
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Negishi, T. (1977). Marketing Costs and Unemployment Equilibrium. In: Fujii, T., Sato, R. (eds) Resource Allocation and Division of Space. Lecture Notes in Economics and Mathematical Systems, vol 147. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-95303-3_3
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DOI: https://doi.org/10.1007/978-3-642-95303-3_3
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