On the Formulation and Solution of Economic Equilibrium Models

This paper is addressed to the formulation and solution of CGE (computable general equilibrium) models. Topics are explored in the following sequence: (1) fundamental concepts of the Scarf equilibrium model; (2) a numerical example; (3) time paths of adjustment; (4) extensions —the production possibility set; (5) further extensions; (6) dimensionality reduction; (7) fixed-point and other general-purpose solution methods; and (8) a survey of numerical models.

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