Solving applied general equilibrium models represented as a mixture of linearized and levels equations

W. Jill Harrison, K. R. Pearson, Alan A. Powell, E. John Small

Research output: Contribution to journalArticleResearchpeer-review

6 Citations (Scopus)

Abstract

General equilibrium moels are usually represented as a system of levels equations (e.g., in North America) or a system of linearized equations (e.g., in Australia). Either representation can be used to obtain accurate solutions. General-purpose software is available in both cases-GAMS or MPS/GE is typically used by levels modellers and GEMPACK by linearizers. Some equations (notably accounting identities) are naturally expressed in the levels while others (especially behavioural equations) are naturally expressed in a linearized form. This paper describes the new GEMPACK facility for solving models represented as a mixture of levels and linearized equations and discusses the advantages to modellers of using such a representation.

Original languageEnglish
Pages (from-to)203-223
Number of pages21
JournalComputational Economics
Volume7
Issue number3
DOIs
Publication statusPublished - 1 Sep 1994

Keywords

  • General Equilibrium models
  • Levels equations
  • Linearized equations
  • Solving economic models

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