Abstract
In an Arrow-Debreu equilibrium of a temporal economy, all transactions are decided upon at the outset. However, the allocation of resources thus predicted can obtain as a temporal equilibrium of a sequence of markets (i.e. as an equilibrium of plans prices and price expectations in Radner’s sense) as soon as ‘enough’ markets are open, markets are complete, and agents have perfect foresight. The failure of one of these conditions — completeness, perfect foresight or more loosely rational expectations — would invalidate the sequential dynamical interpretation of the Walras equilibrium and lead us away from the Arrow-Debreu world.
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© 1991 International Economic Association
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Guesnerie, R. (1991). Comment. In: Arrow, K.J. (eds) Issues in Contemporary Economics. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-11573-0_8
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DOI: https://doi.org/10.1007/978-1-349-11573-0_8
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