Diversity, Globalisation and Market Stability

Abstract : Globalisation has become extremely intense since the earlier seventies. Given that the world economy is getting dose to a single market, a more efficient outcome via globalisation can be expected. However, globalisation may also have negative effects. We illustrate our findings through a simple cobweb model where we analyse different shape and slope of the aggregate supply curve. We show that when globalisation is too intensive, it leads to more instability on markets because of a reduction of behavioural diversity. The economic literature indicates that this diversity can be necessary for market stability as well as for macro-economic stability. We demonstrate that as a result of globalisation, the goals or motivations of economic agents may become more uniform (more profit-oriented) and generate market instability.
Document type :
Preprints, Working Papers, ...
Complete list of metadatas

http://hal.univ-reunion.fr/hal-02168764
Contributor : Réunion Univ <>
Submitted on : Saturday, June 29, 2019 - 9:18:42 AM
Last modification on : Tuesday, July 2, 2019 - 1:32:36 AM

File

WP3.PDF
Explicit agreement for this submission

Identifiers

  • HAL Id : hal-02168764, version 1

Collections

Citation

Laurence Lasselle, Serge Svizzero, Clement Allan Tisdell. Diversity, Globalisation and Market Stability. 2001. ⟨hal-02168764⟩

Share

Metrics

Record views

7

Files downloads

36