Modeling the out-of-equilibrium dynamics of bounded rationality and economic constraints

The paper explicitly derives the six stationary conditions for sector f1 (Eqs. 63–68) and their f2 analogs, starting from the price/wage/interest adjustment rules (Eqs. 58–62) and the constraint forces, showing λP1=λP2=λL1=λL2=0 in any stationary state . It further proves that with s>f1=s>f2=0, factor shares equal the Cobb–Douglas exponents, and that the Jacobian at a stationary state has a double zero eigenvalue with eigenvectors corresponding to (i) within-household labor reallocation across sectors and (ii) debt–equity financing reallocation across firms, leaving real allocations unaffected . Finally, it states the stationary state coincides with the static neoclassical GE allocation and is independent of the μ “power factors” that govern adjustment speeds . The candidate solution reproduces the same steps: imposes stationarity to kill the Lagrange multipliers, derives the same six equations, shows factor shares when s>i=0, identifies the two kernel directions of JT, and concludes independence from μ. Minor differences are editorial (e.g., an informal statement that inventories are financed one-for-one by credit) and do not affect correctness. Overall, the proofs are essentially the same and correct.