Observable implications of equilibrium behavior on finite data

Abstract We analyze the empirical implications of competitive equilibrium for finite datasets. We show that there are no restrictions on the model of competitive equilibrium when only aggregate-level data are observed, as long as there are at least as many consumers as goods or data points. In contrast, the restriction that the income distribution is unobserved but fixed will result in refutable conditions. In deriving these results, we demonstrate a general framework for deriving testable restrictions on finite domains that exploits the semialgebraic structure of the problem.