Quantity Rationing of Economic Transactions in a Risky Environment

Abstract

In the past decades the set of economists has been divided in two disjunct subsets: the “micros” and the “macros” (Leijonhufvud, 1979). The first productive attempts to overcome this dichotomy in economic theory are due to Clower (1965), Leijonhufvud (1968), Patinkin (1965) and Barro/ Grossmann (1971). “Microfoundation of macroeconomics” or “new macroeconomics” or “new microeconomics” are well-known slogans associated with this new way of economic thinking, which has become most popular by Edmond Malinvaud’s famous reformulation of Keynesian unemployment theory (Malinvaud, 1978). Intention of this paper is to follow these lines and to show the very close connections between the theory of individual behaviour under uncertainty and the theory of a general equilibrium with rationing. To start with, rationing of economic transaction on markets for labour and goods in a fixed price situation is described, yielding “temporary equilibria” in the sense, that self-reproducing quantity signals occur. In a second section the predominant role of expectations of agents concerning future prices and rationing situations is emphasized. Some examples will show that expectations tend to be self-fulfilling. Then the question is to be answered why fixed prices may occur for a given period of time providing non-Walrasian adjustment processes and equilibria. One possible answer is given by analyzing monopolistic price and output decisions under uncertainty. This analysis, furthermore, gives some hints for the actual discussion on the type of unemployment in the economics of the Western hemisphere. Finally, the credit market will be introduced and it will be shown that uncertainty may induce rationing of credit demand, as well.