A long-standing unsolved problem in economic theory is how economic
equilibria are attained. Price Dynamics in Equilibrium Models: The
Search for Equilibrium and the Emergence of Endogenous Fluctuations
considers a number of adjustment processes in different economic models
and investigates their dynamical behaviour. Two important themes arising
in this context are `bounded rationality' and `nonlinear dynamics'.
Important sub-themes of the book are the following: how do boundedly
rational agents interact with their environment and does this
interaction in some sense lead to rational outcomes (which may or may
not correspond to equilibria)? The second sub-theme deals with the
consequences of the nonlinear dynamical nature of many adjustment
processes. The results presented in this volume indicate that endogenous
fluctuations are the rule rather than the exception in the search for
equilibrium.
The book uses the theory of nonlinear dynamics to analyze the dynamics
of the different economic models. Due to the complexity of most of the
models, an important role is played by computational methods. In
particular, at regular instances the models are analyzed by numerical
simulations and some computer-assisted proofs are provided. It also
covers a wide range of dynamical models from economic theory. Most of
these models merge the theory of nonlinear economic dynamics with the
theory of bounded rationality. The book is written for anyone with an
interest in economic theory in general and bounded rationality and
endogenous fluctuations in particular. It is entirely self-contained and
accessible to readers with only a limited knowledge of economic theory.
