Credit and Cash-in-Advance in Disequilibrium Models
Sander van der Hoog ()
No 294, Computing in Economics and Finance 2004 from Society for Computational Economics
An agent-based computational model is studied with a sequential market structure. We consider a stationary exchange economy with trade taking place outside equilibrium. This implies quantity rationing and cash in advance constraints. The updating of prices and cash balances makes it necessary for agents to continually re-optimize their trading plans subject to new transaction constraints, which include income-, financial- and quantity constraints. The decision-making process has a moving-horizon structure and the quantity constraints are incorporated into the optimization problem. The dynamics of the out-of-equilibrium price- and quantity adjustment process are shown to depend crucially on the market mechanisms that are imposed
Keywords: Disequilibrium; Sequential markets; Moving-horizon optimization; Financial constraints. (search for similar items in EconPapers)
JEL-codes: C61 D51 E31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-mac and nep-mon
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