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.

References

^ Varian, Hal (1992). Microeconomic Analysis (Third ed.). New York: Norton. ISBN 0-393-95735-7.

[1] Varian, Hal (1992). Microeconomic Analysis (Third ed.). New York: Norton. ISBN 0-393-95735-7.

[1]

See also

References