Abstract
The general equilibrium model developed by Marshall and Walrus is not adequate for analyzing the real world, because the price variables (i.e., price, the rate of interest, and the wage rate), whose adjustment speed is assumed to be infinite in the general equilibrium model, do not in fact instantaneously adjust themselves to the level of a new equilibrium upon the introduction of exogenous disturbances into the system. The reasons for the rigidity of the price variables are the existence of inventories, the inelasticity of expectations, the administrative rigidity during a certain planning period, and the lack of knowledge about correct information. Recognizing the inflexibility of price variables, an alternative model for the general disequilibrium is established. The model includes the commodity market, the bond market, and the labor market. In particular, Patinkin's spillover effects and Clower's duel decision hypothesis are integrated in the model, and Tucker's disequilibrium model is extensively revised by altering his concept of the spillover variables. That is, the spillover demands (or supplies) occur due to the exogenous disturbances, but they are still dependent upon the price variables in the system because if prices change, the quantity of spillover will also change. ...
Yoo, Jang H. (1972). The general disequilibrium and market adjustment mechanisms in macroeconomic models. Texas A&M University. Texas A&M University. Libraries. Available electronically from
https : / /hdl .handle .net /1969 .1 /DISSERTATIONS -187277.