Supply-constrained equilibria in economies with indexed prices
Abstract In an exchange economy prices are rigid and the prices are restricted by index functions. The indexes can be of a general type and can be different for each commodity. Indexed prices can appear in other indexes. Also considered are restrictions in terms of a general price index. Existence of a Dreze equilibrium, and particularly a supply-constrained Dreze equilibrium, is proved. The system of indexes must be solvable in terms of unconstrained prices and for the unconstrained commodities a monotonicity condition must hold.