Economics · General Equilibrium Theory
Regarding the tatonnement process and stability of Walrasian general equilibrium, identify the INCORRECT statement:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Tatonnement is a hypothetical price-adjustment process where no trade occurs at disequilibrium prices
- 2The Walrasian stability condition requires dz/dp < 0 where z is excess demand
- 3Hahn and Negishi proved that tatonnement converges globally for all economies satisfying gross substitutability
- 4The presence of complementary goods guarantees global stability of tatonnement✓
Correct answer
The presence of complementary goods guarantees global stability of tatonnement
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