Tatonnement and Price Setting in General Equilibrium

Dedicated to the memory of Rolf Mantel. For discussions and comments we thank Aleksei Oskolkov (discussant), Arnaud Costinot, Christian Wolf, Tim Kehoe, Fernando Alvarez, Juanpa Nicolini, Ariel Burstein, David Sekiguchi, Ben Golub, John Geanakoplos, Manuel Amador, Ludwig Straub, Gabe Chodorow-Reich, Xavier Gabaix, Nobu Kiyotaki, Kiminori Matsuyama, Joshua Gans, Jacob Smith as well as conference and seminar participants at NBER-SI, Cowles GE Conference, Nemmers conference, Minnesota Macro conference, Harvard, University of Chicago, MIT, Yale, BU, Columbia, NYU, Princeton, Stanford, Berkeley, UCLA and University of Tokyo. We thank Tomás Caravello, Veronica Backer Peral, Zane Miller and Anchi Xia for excellent research assistance. Lorenzoni serves as a consultant to the Federal Reserve Bank of Chicago. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.