A note on the structural stability of the equilibrium manifold

Abstract

In a smooth pure exchange economy with fixed total resources we investigate whether the smooth selection property holds when endowments are redistributed across consumers through a continuous (non local) redistribution policy. We show that if the policy is regular then there exists a unique continuous path of equilibrium prices which support it. If singular economies are involved in the redistribution, then an analogous result can be obtained if the singular policy is the projection of a path transversal to the set of critical equilibria.Equilibrium manifold, regular equilibria, catastrophes, structural stability, smooth selection of prices