New economic model introduces rationing equilibrium, changing traditional market dynamics.
The article explores how a new type of economic equilibrium can exist when all goods are indivisible at the individual level but divisible at the overall economy level. By introducing a form of money that doesn't affect consumer preferences, the researchers show that a competitive equilibrium can still be achieved, even when traditional models fail. This new equilibrium, called a rationing equilibrium, ensures that all goods are allocated efficiently, with money having a positive value. This finding challenges previous economic theories and provides a new perspective on how economies can reach stability.