Stability of Walrasian and Marshallian adjustment mechanisms in multiple markets

Abstract

Comparing the convergence of a Walrasian price adjustment process and that of a Marshallian quantity adjustment process in a multiple market setting, we show that both mechanisms are locally stable for any adjustment speeds if the demand system is characterised by a negative dominant diagonal.local stability; Walrasian process; Marshallian process; dominant diagonal matrices; multiple markets; price adjustment; quantity adjustment.