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Production, Trade, Prices, Exchange Rates and Equilibration in Large Experimental Economies

Noussair, Charles and Plott, Charles and Riezman, Raymond (2007) Production, Trade, Prices, Exchange Rates and Equilibration in Large Experimental Economies. European Economic Review, 51 (1). pp. 49-76. ISSN 0014-2921.

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We study market equilibration in laboratory economies that are larger and more complex than any that have been studied experimentally to date. Complexity is derived from the fact that the economies are “international” in economic structure with multiple input, output, and foreign exchange markets in operation. The economies have twenty-one markets and due to the fact that they have roughly fifty agents, the economies are characterized by several hundred equations. In spite of the complexity and interdependence of the economy, the results demonstrate the substantial power of the general equilibrium model of perfect competition to predict the direction of movement of market-level variables. Empirical patterns in the convergence process are explored and described.

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Additional Information:© 2006 Elsevier B.V. We thank Carol McAusland, Jacob Goeree, Zheng Liu, and seminar participants at Nottingham University, the University of Amsterdam, and the Hong Kong University of Science and Technology for helpful comments. We thank Steven Tucker and Tara Larson for research assistance.
Subject Keywords:experiment, international trade, exchange rates
Issue or Number:1
Classification Code:JEL: C9, F00
Record Number:CaltechAUTHORS:20140303-101923699
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Official Citation:Charles Noussair, Charles Plott, Raymond Riezman, Production, trade, prices, exchange rates and equilibration in large experimental economies, European Economic Review, Volume 51, Issue 1, January 2007, Pages 49-76, ISSN 0014-2921, (
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44080
Deposited By: Susan Vite
Deposited On:03 Mar 2014 18:50
Last Modified:03 Oct 2019 06:14

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