a general-equilibrium model is a model in which course hero

What is general equilibrium Modelling?

Computable general equilibrium (CGE) models are a class of economic models that use actual economic data to estimate how an economy might react to changes in policy, technology or other external factors. CGE models are also referred to as AGE (applied general equilibrium) models.

Who developed general equilibrium model?

French economist Leon Walras introduced and developed the theory in the late 19th century.

What is general equilibrium Class 12?

General equilibrium means an equilibrium which is derived by considering the effect of many variables at a time. 2. It neglects the interdependence between variables.

In which economics is the study of general equilibrium done?

Walrasian equilibrium The first attempt in neoclassical economics to model prices for a whole economy was made by Léon Walras. Walras' Elements of Pure Economics provides a succession of models, each taking into account more aspects of a real economy (two commodities, many commodities, production, growth, money).

What is general equilibrium theory?

common interpretation of this theorem (as in MWG) is that “anything goes”in general equilibrium theory. That is, that without very special assumptions (likeCobb-Douglas preferences or something like that): (i) pretty much any comparativestatics result could be obtained in a general equilibrium model, and (ii) generalequilibrium theory has essentially no empirical content. We’ll see in the nextsection that this is not quite right.

What is the Sonnenschein-Debreu-Mantel Theorem?

The Sonnenschein-Debreu-Mantel Theorem says that the aggregate excess demandfunction has only minimal properties. An implication is that utility maximizationimposes no testable restrictions on equilibrium prices. This suggests that onecouldnottestthehypothesisthatagentswereorwerenottradinginaWalrasianfashion by observing price data, unless one also made some assumptions about thepreferences of the agents who were trading.