A Portfolio Equilibrium Model of Gold and Capital in an Integrated Walrasian General Equilibrium and Neoclassical Growth Theory
Wei-Bin Zhang ()
International Journal of Economics and Empirical Research (IJEER), 2015, vol. 3, issue 12, 616-627
Purpose: This paper proposes a dynamic portfolio equilibrium growth model to examine the relationship between growth and inequality by integrating the Walrasian general equilibrium and neoclassical growth theories. A new aspect of the study is to determine gold value and how the value is related to growth and inequality. The economic structure and description of production technologies are based on the Walrasian general equilibrium theory and the neoclassical growth theory. Methodology: We use an alternative utility function proposed by Zhang to describe the behavior of households. We build a model for any number of types of household with endogenous wealth and gold distribution. We also provide a computational procedure for simulating model with proper initial conditions. Findings: We simulate the model for the economy with three types of households. Recommendations: We plot the motion of the economic system, identify the existence of a unique stable equilibrium point, and carry out comparative dynamic analysis with regard to changes in some parameters.
Keywords: Walrasian general equilibrium; Neoclassical growth theory; Gold value (search for similar items in EconPapers)
JEL-codes: D50 O41 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ijr:journl:v:3:y:2015:i:12:p:616-627
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