Differential equations and stability of competitive economy
|Author:||Bc. Marek Šabata|
|Year:||2014 - summer|
|Leaders:|| RNDr. Tomáš Bárta Ph.D.
|Work type:|| Bachelors
|Awards and prizes:||B.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good bachelors diploma thesis.|
|Abstract:||In the thesis, the author will analyse the theory of differential equations and its applications in economic
model of price adjustment processes in competitive markets.
First of all, the economic model sufficient to study stability of the market is introduced. Next
microeconomic theory of competitive markets is presented and theory of differential equations is laid
out, including the stability theory. Differences between the general model and the pure exchange model
are discussed. Under certain microeconomic assumptions such as weak axiom of revealed preferences,
gross substitutability, Walras’s law and other properties of competitive markets, local and global
stability of the market is proved.