Behavioral heterogeneity and structural properties of aggregate demand

Article Abstract:

Aggregate demand of a large population of households was examined. A theoretical basis was developed which does not depend on specific models of individual behavior. A distributional characteristic of the population was used by assuming a sufficient heterogeneity in the ways in which various households respond to changes in prices and income. Sufficient heterogeneity means that there are some essential characteristics of market demand which cannot be obtained merely from assumptions of individual behavior.

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Dispersed excess demands, the weak axiom and uniqueness of equilibrium

Article Abstract:

A robust, economically interpretable sufficient condition under which mean consumer excess demand conforms with the weak axiom, and competitive equilibrium is unique, is shown. The condition is named as increasing dispersion of excess demands (IDED). IDED requires that the consumers' excess demand vectors move apart on average if they were provided additional money. IDED is may be tested through cross-section data on consumer expenditures and endowments.

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Disaggregation of excess demand functions in incomplete markets

Article Abstract:

General equilibrium markets, where the number of consumers is N, the number of goods is L and the dimension of the space of admissible trades is K, were investigated. K = (L -1) for the case of complete markets. It was shown that, if N > or = K, any non-vanishing analytic function satisfying the natural extension of the Walras law is, locally at least, the excess demand function of such a market.

Markets (Economics)

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