A regular economy is an economy characterized by an excess demand function which has the property that its slope at any equilibrium price vector is non-zero. In other words, if we graph the excess demand function against prices, then the excess demand function "cuts" the x-axis assuring that each equilibrium is locally unique. Local uniqueness in turn permits the use of comparative statics - an analysis of how the economy responds to external shocks - as long as these shocks are not too large.
An important result due to Debreu (1970) states that almost any economy, defined by an initial distribution of consumer's endowments, is regular. In technical terms, the set of nonregular economies is of Lebesgue measure zero.
Combined with the index theorem this result implies that almost any economy will have a finite (and odd) number of equilibria.
Famous quotes containing the words regular and/or economy:
“While you’re playing cards with a regular guy or having a bite to eat with him, he seems a peaceable, good-humoured and not entirely dense person. But just begin a conversation with him about something inedible, politics or science, for instance, and he ends up in a deadend or starts in on such an obtuse and base philosophy that you can only wave your hand and leave.”
—Anton Pavlovich Chekhov (1860–1904)
“War. Fighting. Men ... every man in the whole realm is in the army.... Every man in uniform ... An economy entirely geared to war ... but there is not much war ... hardly any fighting ... yet every man a soldier from birth till death ... Men ... all men for fighting ... but no war, no wars to fight ... what is it, what does it mean?””
—Doris Lessing (b. 1919)