Solving Inequality Constrained Problems using GEMPACK

Liangyue Cao

No 331932, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: An alternative method, which is completely different from the existing two pass method, is proposed to solve problems with inequality constraints using GEMPACK. The key innovation of the method is perturbation. The new method is easy to implement in GEMPACK. Numerical tests on a number of examples including an example of perfect substitution with capacity constraints and a hypothetic intertemporal general equilibrium model with inequality constraints are presented to demonstrate effectiveness of the method. The method has also been successfully implemented in the Global Trade and Environment Model (GTEM) and in the Monash Multi-Regional Forecasting (MMRF) model for imposing constrained emission-permit trading as well as in the newly developed Treasury Computable General Equilibrium (TCGE) model for imposing non-negative sector-specific rate of return on capital.

Keywords: Research Methods/Statistical Methods; International Relations/Trade (search for similar items in EconPapers)
Pages: 34
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331932

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