Topic outline

  • General

    Teachers: Jean Marc Bonnisseau & Elena del Mercato
    Friday, from 9:00 to 12:00, Room R1-09 (it means first floor, room “09”) - PSE Campus Jourdan, 48 Boulevard Jourdan, 75014 Paris
    E-mails: ,

    Remark that the remote written essay on a seleceted research article scheduled on Saturday, October 31, 2020 has been postponed to Saturday, November 7, 2020.

    Course in English - First Semester 2020/2021

    General Presentation

    The general equilibrium theory studies the interactions among heterogeneous agents on commodity and financial markets. The course begins with an outline of the main properties of a competitive equilibrium in the classical Arrow-Debreu model (existence, efficiency, local uniqueness). The course then focuses on advanced questions arising from market imperfections and financial markets, such as externalities, increasing returns to scale and incomplete financial markets.

    Key words: equilibrium, competition, market imperfections: externalities, financial markets.

    Class: Every Friday, 9:00 - 12:00, from September 18 to December 18, 2020 - Room R1-09 - PSE Campus Jourdan, 48 Boulevard Jourdan, 75014 Paris

    The course consists of two parties: "General equilibrium and Externalities" and "General equilibrium and Financial Markets", see below.

    "General equilibrium and Externalities"

    Duration: From Friday, September 18 to Friday, October 30, 2020

    Mode of evaluation: attendance & presentation of selected research articles and/or written exam


    - An overview of general equilibrium theory; main results

    - Competitive equilibrium with externalities; basic results

    - Externalities and market failure; perfect internalization, Pareto improving policies

    - Externalities in production economies

    - Increasing returns to scale; optimality, marginal pricing rule.


    "General equilibrium and Financial Markets"

    Duration: From Friday, November 6 to Friday, December 18, 2020

    Mode of evaluation: attendance & presentation of selected research articles and/or written exam


    - The two period economy with uncertainty; risk aversion

    - Arrow securities, financial markets ; real, nominal and numeraire assets

    - Absence of arbitrage opportunities, existence of present value vector, uniqueness, risk neutral probability

    - Completeness of the financial structure

    - Existence of a financial equilibrium for nominal and numeraire asset; generic existence for real assets

    - Behaviour of the firms and incomplete markets


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