Econometrica: May 1985, Volume 53, Issue 3
The Computation of General Equilibrium in Economies with a Block Diagonal Pattern
Gerard van der LaanIn this paper we consider the computation of an equilibrium in a pure exchange economy with a block diagonal pattern. Such a structure appears in, e.g., international trade models. Utilizing the block diagonal pattern, the full equilibrium problem is reformulated as a problem on the product space of several lower-dimensional price-simplices. Some numerical results show the usefulness of this method.
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