A note on the “size” of determinacy and indeterminacy |
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Authors: | Julio Dávila |
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Institution: | (1) Departamento de Economía e Historia Económica, Universidad Autónoma de Barcelona, E-08193 Bellaterra (Barcelona), SPAIN, ES |
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Abstract: | Summary. It is shown in this note that in an incomplete markets economy with uncountably many states of the world there may be uncountably
many isolated equilibria as well as uncountably many non-isolated equilibria. Moreover, both subsets can be simultaneously
of second category. Therefore, none of the subsets can be considered negligible with respect to the other, neither from a
cardinality point of view nor from a topological one. Unfortunately, this fact prevents from claiming that these economies
may have “typically” determinate equilibria – even though uncountably many of them – as would have been desirable for comparative
statics exercises.
Received: May 19, 1995; revised version: March 24, 1997 |
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Keywords: | JEL Classification Number: D52 |
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