RICARDO AND LEMKE

Christian Bidard

No 2012-48, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: We study the economic mechanism which sustains the substitution of a marginal method for another when demand increases, in the presence of scarce resources. In those Ricardian dynamics, it is shown that the outgoing method is determined by the quantity side of the problem, the incoming method by the value side. That discrepancy explains both the possible failure of the dynamics and the possible occurrence of multiple equilibria. Conditions for existence, uniqueness and the working of the dynamics are stated. A parallel is drawn with the parametric Lemke algorithm used to solve linear complementarity problems.

Keywords: Dynamics; Lemke; rent; Ricardo; scarce resources (search for similar items in EconPapers)
JEL-codes: B12 C61 C65 D33 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2012
New Economics Papers: this item is included in nep-hme
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2012-48

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