Structural stability, Morse's lemma and singular economies

Abstract

In this paper we consider economies whose consumption spaces are subsets of a Hilbert space with non-empty interior, and we introduce the Negishi approach to characterize the social equilibria of these economies. Using Morse's lemma, we analyze the main characteristics of two-agents-economies, and classify them. We show that the characteristics of \similar economies", in the sense introduced in [Debreu,G. (1970)], can be very di®erent from the structural stability point of view. Finally, we show that the useful mathematical de¯nition of structural stability is not enough to characterize structural stability in economics.Structural stability, Morse functions, singular economies