Abstract
This paper develops a model of an open economy in disequilibrium. It examines the behavior of such an economy under non-tatonnement conditions when markets fail to clear at prevailing prices and when price and quantity adjustment is not instantaneous. False trading and the consequences of discrepancies between individual plans and realizations are investigated. It is argued that an individual’s inability to bringplanned transactions to realization forces him to reevaluate his behavior. New demand and supply functions emerge which are constrained functions containing spill-over effects of market failures as arguments.
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© 1977 D. Reidel Publishing Company, Dordrecht, Holland
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Arndt, S.W. (1977). International Trade and Payments when Markets Fail to Clear. In: Schwödiauer, G. (eds) Equilibrium and Disequilibrium in Economic Theory. Theory and Decision Library, vol 13. Springer, Dordrecht. https://doi.org/10.1007/978-94-010-1155-6_35
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DOI: https://doi.org/10.1007/978-94-010-1155-6_35
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-1157-0
Online ISBN: 978-94-010-1155-6
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