General Equilibrium Theory: An Introduction

by Ross M. Starr

Overview

General Equilibrium Theory: An Introduction presents the mathematical economic theory of price determination and resource allocation from elementary to advanced levels, suitable for advanced undergraduates and graduate students of economics. This Arrow–Debreu model (known for two of its most prominent founders, both Nobel Laureates) is the basis of modern price theory and of a wide range of applications. The new edition updates discussion throughout and expands the number and variety of exercises. It offers a revised and extended treatment of core convergence, including the case of non-convex preferences, and introduces the investigation of approximate equilibrium with U-shaped curves and non-convex preferences.

Product Details

ISBN-13:	9781139234870
Publisher:	Cambridge University Press
Publication date:	04/25/2011
Sold by:	Barnes & Noble
Format:	eBook
File size:	4 MB

About the Author

Ross M. Starr is Professor of Economics at the University of California, San Diego, where he has taught since 1980. He has also served on the faculties of Yale University, Connecticut, the London School of Economics and Political Science and the University of California, Davis, and he held a Guggenheim Fellowship at the University of California, Berkeley. Professor Starr's research focuses on general equilibrium theory, mathematical economics and monetary theory. He is the editor of General Equilibrium Models of Monetary Economies (1989) and coeditor of the three-volume Essays in Honor of Kenneth Arrow (Cambridge, 1986). His articles have appeared in journals such as Econometrica, Economic Theory, the Journal of Economic Theory, the Journal of Money, Credit, and Banking, the Quarterly Journal of Economics and the Review of Economic Studies. Cambridge University Press released the first edition of General Equilibrium Theory: An Introduction in 1997.

Table of Contents

Part I. General Equilibrium Theory: Getting Acquainted: 1. Concept and history of general equilibrium theory; 2. An elementary general equilibrium model - the Robinson Crusoe economy; 3. The Edgeworth box; 4. Integrating production and multiple consumption decisions: a 2 x 2 x 2 model; 5. Existence of general equilibrium in an economy with an excess demand function; Part II. Mathematics: 6. Logic and set theory; 7. RN: real N-dimensional Euclidean space; 8. Convex sets, separation theorems, and non-convex sets in RN; 9. The Brouwer fixed point theorem; Part III. An Economy with Bounded Production Technology, Supply and Demand Functions: 10. Markets, prices, commodities, and mathematical economic theory; 11. Production with bounded firm technology; 12. Households; 13. A market economy; 14. General equilibrium of the market economy with an excess demand function; Part IV. An Economy with Unbounded Production Technology, Supply and Demand Functions: 15. Theory of production: the unbounded technology case; 16. Households: the unbounded technology case; 17. A market economy: the unbounded technology case; 18. General equilibrium of the market economy: the unbounded technology case; Part V. Welfare Economics and the Scope of Markets: 19. Pareto efficiency and competitive equilibrium; 20. Time and uncertainty: futures markets; Part VI. Bargaining and Equilibrium: The Core: 21. The core of a market economy; 22. Convergence of the core of a large economy; Part VII. An Economy with Supply and Demand Correspondences: 23. Mathematics: analysis of point to set mappings; 24. General equilibrium of the market economy with an excess demand correspondence; 25. U-shaped cost curves and concentrated preferences; Part VIII. Standing on the Shoulders of Giants: 26. Next steps; 27. Summary and conclusion.

Editorial Reviews

"Most books on the theory of general equilibrium have adopted the terribly arid axiomatic style illustrated in pure mathematics by Nicolas Bourbaki’s treatise. That style makes no compromise with rigor. But it often defies intuition. Ross Starr’s book is the best attempt so far at combining economic intuition with rigor in dealing with those staples of general equilibrium theory that are the existence and the two welfare theorems. Part A of the book deals with special cases of the general equilibrium model up to the two-good, two-factor, two-agent model, something that is never done in more ‘advanced’ presentations. Part B is a remarkably lucid introduction to the mathematics of point-set topology needed in any serious study of the general equilibrium model. Both parts will be welcome by undergraduate students. The rest of the book is more suitable to first-year graduate students but, even there, the author does his best to convey enough economic intuition for the model to be economically interesting. Two points are particularly noteworthy in that respect: 1) the treatment of non-convexity in large economies (preferences, production sets) through the Shapley-Folkman theorem; and 2) a simplicial proof of Brouwer’s fixed point theorem." – Yves Balasko, University of York, United Kingdom

"This book contains an excellent exposition of classic general equilibrium theory. While it eases the reader into the subject slowly, it does so without compromising the analytical rigor that is necessary to understand the elegant foundations of the economic model of competitive markets." – Alberto Bisin, New York University

"Ross Starr has made a fine service to the profession when preparing this new edition of his nice introductory textbook on general equilibrium theory. This volume is slim, yet fully self-contained and rigorous; it should be quite useful to advanced undergraduates and graduate students, as well as to researchers in economic theory and mathematical economics." – Jean-Michel Grandmont, Università Ca' Foscari di Venezia, Italy; Centre de Recherche en Economie et Statistiques, France

"A comprehensive treatment of classical general equilibrium theory from its most elementary to its most abstract formulation. Self-contained mathematical chapters and exercises at the end of each chapter make this an ideal textbook for advanced-level courses." – Paolo Siconolfi, Columbia University

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