Dynamic structure of disequilibrium models

Lu, M. and Qin, D. (1998) Dynamic structure of disequilibrium models Economics of Planning, 31, (1), pp. 15-27.


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This paper investigates the dynamic structure of a standard disequilibrium model. By assuming that the model variables are non-stationary time series with respect to ample empirical evidence, we find the following: 1) It is the exogenous variables rather than the price adjustment process that form the real adjustment force of the model; 2) Quantity disequilibrium and price disequilibrium are isomeric in the model, and follow a weakly stationary process when all the variables are I (1) nonstationary; 3) The disequilibrium process has a none-zero mean when the weakly exogenous variables of the demand equation do not cointegrate with those of the supply equation, corresponding to certain `chronic disequilibrium' phenomena; 4) The isomerism between quantity disequilibrium and price changes makes it unnecessary to lean on the `min condition' to characterise disequilibrium.

Item Type: Article
ISSNs: 0013-0451 (print)
Related URLs:
Keywords: disequilibrium, min condition, nonstationarity, centrally planned economy
ePrint ID: 32996
Date :
Date Event
Date Deposited: 21 Jun 2007
Last Modified: 16 Apr 2017 22:18
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/32996

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