Journal of Mathematical Economics

Is an evolutive model in the framework of the General Equilibrium Theory In this work, we consider a general equilibrium model in which an economy is characterized by the distribution of firms on the branches of industry. We will show that it is possible to build a dynamic based on the decisions of the managers or owners of the firms. Their investment decisions will cause the distribution of the firms in the branches of production to be modified, which will result in price changes. In a neighborhood of a singularity, these decisions, even when they are small, could lead to abrupt and unexpected changes in the behavior of the economy. It is for this reason that we say that singular economies are the prelude to economic crises. In opposite, in a neighborhood of a regular economy, small changes in the decisions of the managers do not imply big changes in the posterior behavior of the economy.