Seminar of Department of Theoretical Economics by Dmitriy Levando "A note on price volatility in general equilibrium" and "Fiat money oligopolistic economy with decision to work and equilibrium default"

Dear colleagues,  

Department of Theoretical Economics invites you to take part in the seminar that will be held  on the 25th of September at 1:40 p.m., address: Shabolovka 26, building 1, room 1302

Working language of the seminar -  English, Russian.

Speaker: Dmitriy Levando, Assistant Professor of the Department of Theoretical Economics and Maksim Sakharov, senior lecturer of  Bauman Moscow State Technical University

Topic of the seminar:   “A note on price volatility in  general equilibrium”

Abstract:

We are developing  a theory of equilibrium market instability in a   general equilibrium duopoly caused merely by strategic trade. An economy is   described  as a strategic market game, where players have market power as buyers and sellers. 

First order conditions of individual decisions are   first kind integral equations of Fredholm, with   probability distributions as unknown variables. The game has multiple mixed strategies  as Nash equilibria,   which can  not be  calculated precisely. Resulting market price does not have  information discovery properties.  We demonstrate the multiplicity of Pareto-improving pure strategies, and their induced prices and allocations, which can be described  as  `natural instabilities'   within markets.

2^nd topic of the seminar: “Fiat money oligopolistic economy with decision to work and equilibrium default”

Abstract:

We are addressing  imperfect competition in the gap between macro and micro economics  using equilibrium default approach of  Shubik-Wilson (1978), where individual demand for a fixed supply  of non-consumable money is regulated by a punishment for default. A worker and an entrepreneur operate at labor,  consumable good and credit markets simultaneously; the worker enjoys labor and  the consumable good, entrepreneur enjoys the    good and to manage workers{'}s time. Both have indeterminacies in  beliefs about strategies of each other.   The game has a continuum of equilibrium pure strategies, but  resulting equilibrium mixed strategies lead to an ill-posed   problem, which can not be     calculated precisely.   We  bound our numerical analysis by  some Pareto-improving strategies, which  have positive probabilities in some equilibria,  and then demonstrate   volatility of  all   endogenous   features of the model: demand for the consumable goods and non-consumable credit, supply  of  the good, price, interest rate, total value of default, worker{'}s time   supply.  Endogenous fluctuations  at different markets are generated without outside shocks and are not independent.

We look forward to welcome you at the seminar!