Exchange economy
Exchange economy is technical term used in microeconomics research to describe interaction between several agents. Each agent brings his/her own endowment, and they can exchange products among them based on a price system. Two types of exchange economy are studied:
- In a pure exchange economy, all agents are consumers; there is no production and all agents can do is exchange their initial endowments.
- In contrast, in an exchange economy with production, some or all agents are firms that may also produce new goods.[1]:313
A major interesting question regarding an exchange economy is if and when the economy attains a competitive equilibrium.
See also
References
- ↑ Varian, Hal (1992). Microeconomic Analysis (Third ed.). New York: Norton. ISBN 0-393-95735-7.
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