AN ADJUSTMENT PROCESS FOR THE STANDARD ARROW-DEBREU MODEL WITH PRODUCTION

In this paper we present a tatonnement process describing adaptations of prices and quantities in a convex general equilibrium model with pr oduction. The adaptations are determined by the state of the market an d the starting price vector. The main result of the paper shows that f or any economy out of a broad class of so-called, semi-algebraic conve x economies and for any starting tuple consisting of a price vector an d a related demand and supply, the process defines at least one path c onnecting the starting tuple and an equilibrium. The second result con cerns the uniqueness of the path, given an arbitrary starting tuple, f or a generic economy out of most standard classes of convex production economies, with consumer demand being unique at all price vectors. In that way, we generalize existing results on converging processes.