The Outlook of the Sovereign Planner: The Linear Activity Model

Ronny Norén
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Ronny Norén: Mid Sweden University

Chapter Chapter 2 in Equilibrium Models in an Applied Framework, 2013, pp 9-20 from Springer

Abstract: Abstract The purpose of this chapter is to formulate a linear numerical general equilibrium model. The model is essentially a Leontief type of input–output model, extended with resource constraints. In this chapter the equilibrium model is developed and analysed under conditions of competitive market behaviour. To provide the reader with an understanding of the nature of this model and its link to economic theory, the concept of welfare optimum (Pareto efficiency) and its logical relation to competitive equilibrium is used as a connecting thread between the concept of economic equilibrium and the mathematical programming formulation. The following sections will highlight the major features of the model. At the same time, the assumptions necessary to make the model operational are made explicit.

Keywords: Market Equilibrium; Shadow Price; Competitive Equilibrium; Excess Supply; Pareto Efficiency (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-34994-2_2

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DOI: 10.1007/978-3-642-34994-2_2

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