1.   Hemler and Longstaff derived a number of empirical predictions of their general equilibrium model that differ from those of the no-arbitrage model.

2.   In effect, they involve a comparison of the general equilibrium of the economy with and without the government budget.

3.   Integrating transport costs into a general equilibrium trade model is a messy affair even with constant returns and perfect competition.

4.   Their empirical results largely supported the predictions of the general equilibrium model, rather than those of the no-arbitrage model.

5.   Firstly general equilibrium analysis was used to study the effects of CU formation, and secondly it was extended to embrace more than two goods.

6.   Once this adjustment has been achieved, a state of Walrasian general equilibrium will prevail.

7.   This is called the point of general equilibrium.

8.   The stability of the general equilibrium.