STABILITY IMPLICATIONS OF INTER-REGIONAL MOVEMENT IN MACRO DISEQUILIBRIUM MODELS

This paper considers the global stability of disequilibrium macro models. Frequently past discussions of stability have ignored the possibility of movement between regimes, where regimes are defined by the combinations of quantity constraints which exist. The present paper shows the precise conditions for, and the implications of, such interregional movement. Conventionally derived assertions of either stability or instability may be mitigated by interregional movement.