General Equilibrium Models - Numerical Method and Stability

Antti Lappeteläinen

No 26, Research Reports from VATT Institute for Economic Research

Abstract: Dynamic general equilibrium models are studied from a mathematical point of view. Study concentrates on conditions of optimality, stability and especially numerical solution algorithms. Models are also studied in respect of suitability for expanding the generational accounting method. In addition to Ramsey model two dynamic self-made models are presented, one of which uses the overlapping generations structure. Technological process is simulated with these models using various numerical methods. Also methods of analysing stability properties are presented and executed. At the end of the study several weaknesses of the general equilibrium analysis and suggestions how to overcome these weaknesses are discussed and a model structure suitable for expanding the generational accounting is presented.

Keywords: Dynamic equilibrium models; overlapping generations; numerical methods; stability.; Economic growth; Taloudellinen kasvu; Policy analysis and modelling; Päätöksenteon tuki ja mallintaminen; C680 - Computable General Equilibrium Models; D580 - Computable and Other Applied General Equilibrium Models (search for similar items in EconPapers)
Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:fer:resrep:26

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