General Equilibrium Theory - M2 MMMEF and M2 APE
Jean-Marc Bonnisseau & Elena del Mercato
Master M2 MMMEF and Master M2 APE
Course in English - First Semester 2019/2020
The general economic equilibrium theory studies the interactions among heterogeneous agents on commodity and financial markets. The course focuses on the classical Arrow-Debreu model and the main properties of a competitive equilibrium (existence, efficiency, local uniqueness, structure of the equilibrium set). The course is a necessary step to handle advanced questions arising from financial markets and markets imperfections, such as externalities, imperfect competition or increasing returns to scale.
Key words: equilibrium, competition, optimality, existence, sensitivity.
Class: Every Friday, 9:00 - 12:00, from September 13 to December 6, 2019 - Room R2-21 - PSE Campus Jourdan, 48 Boulevard Jourdan, 75014 Paris
Final Exam: Remark that, because of the transportation disturbances, the Final Exam has been postponed to Friday, January 17, from 14:00 to 17:00 - Room S/3 - Maison des Sciences Economiques (MSE), 106-112 Boulevard de l'Hopital - 75013 Paris
Evaluation: Homeworks and Final Exam.
- COURSE CONTENT
- Overview of an equilibrium model. The model of an Arrow-Debreu economy.
- The consumer. Preferences, demand function, indirect utility function, compensated demand, properties of the demand, Walras law.
- The producer. Production set, competitive behavior, competitive supply, properties of the supply function.
- Walras equilibrium, wealth and initial endowments, equilibrium in an exchange economy, first properties.
- Profit sharing rules, equilibrium of a production economy, existence of equilibria by simultaneous optimization.
- Pareto optima, the two theorems of welfare economics.
- A differentiable approach. Regular utility functions, properties of the Marshallian and the Hicksian demands. Generalized Slutsky equations.
- Differential characterization of equilibria. Regular economies, properties, finiteness of the number of equilibria, differentiable selections of the equilibrium price, genericity.
- Structure of the Pareto optima, no-trade equilibrium and Pareto optima, uniqueness of equilibrium.
* Balasko Y., Foundations of the Theory of General Equilibrium, Academic Press (1988)
* Debreu G., Theory of value, Cowles Foundation Monographs Series (1959)
* Florenzano M., General Equilibrium Analysis: Existence and Optimality Properties of Equilibria, Springer (2005)
* Mas-Colell, A., The Theory of General Economic Equilibrium: A Differentiable Approach, Cambridge University Press, Cambridge, UK (1985).
* Mas-Colell, A., Whinston, M.D., and Green, J.R., Microeconomic Theory, Oxford University Press (1995).
* Tallon, J.M., Equilibre général, une introduction, Vuibert (1997)
* Villanacci, A., Carosi, L., Benevieri, P., Battinelli, A., Differential Topology and General Equilibrium with Complete and Incomplete Markets, Kluwer Academic Publishers (2002)
- LECTURE NOTES