TASTE AND SINGULAR ECONOMIES

Abstract

The purpose of this paper is to show sorne examples, and characteristics of the economies where, as a consequence of changes in the utility functions, the set of equilibria changes. These changes play a crucial role to understand the behavior of the economy as a system. An economy will be called singular if small changes in the tastes of the consumers imply big changes in the set of equilibria. In this paper, we use the Negishi (1960) approach to model the economic system composed by a finite number of agents and goods, to do so we use the concepts of Morse and stable functions to characterize the singular economies.