Abstract
Comparative statics in competitive general equilibrium (GE) environments provide insight into the operation of GE models and a means to confront GE models with data. This article focuses on a canonical comparative statics prediction: in an exchange economy, aggregate endowment changes are negatively related to equilibrium price changes. In particular, an increase in the aggregate endowment of a commodity lowers its equilibrium price.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Becker, G. 1962. Irrational behavior and economic theory. Journal of Political Economy 70: 1–13.
Brown, D., and R. Matzkin. 1996. Testable restrictions on the equilibrium manifold. Econometrica 64: 1249–1262.
Chiappori, P., I. Ekelund, F. Kübler, and H. Polemarchakis. 2004. Testable implications of general equilibrium theory: A differentiable approach. Journal of Mathematical Economics 40: 105–119.
Echenique, F., and A. Manelli. 2005. Comparative statics, English auctions, and the Stolper–Samuelson theorem. Mimeo. Tempe: Arizona State University.
Grandmont, J. 1992. Transformations of the commodity space, behavioral heterogeneity and the aggregation problem. Journal of Economic Theory 57: 1–35.
Hicks, J. 1939. Value and capital. Oxford: Clarendon Press.
Hildenbrand, W. 1983. On the law of demand. Econometrica 51: 997–1018.
Kehoe, T. 1987. Comparative statics. In The new Palgrave: A dictionary of economics, ed. J. Eatwell, M. Milgate, and P. Newman, vol. 1. Basingstoke: Palgrave.
Kübler, F. 2003. Observable restrictions of general equilibrium with financial markets. Journal of Economic Theory 110: 137–153.
Nachbar, J. 2002. General equilibrium comparative statics. Econometrica 79: 2065–2074.
Nachbar, J. 2004. General equilibrium comparative statics: The discrete case with production. Journal of Mathematical Economics 40: 153–163.
Quah, J. 1997. The law of demand when income is price dependent. Econometrica 65: 1421–1442.
Quah, J. 2003. Market demand and comparative statics when goods are normal. Journal of Mathematical Economics 39: 317–333.
Snyder, S. 1999. Testable restrictions of Pareto optimal public good provision. Journal of Public Economics 71: 97–119.
Williams, S. 2002. Equations on the derivatives of an initial endowment-competitive equilibrium mapping for an exchange economy. Mimeo. Champaign-Urbana: University of Illinois.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Nachbar, J. (2018). Comparative Statics. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_322
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_322
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences