Computing all of the equilibria of economies with two factors of production |
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Authors: | Timothy J. Kehoe |
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Affiliation: | Clare College, Cambridge CB2 ITL, UK |
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Abstract: | In general, no method to find all the equilibria of an economy is known that does not involve an exhaustive search. In this paper we argue that for an economy with a generalized input– output structure and two factors of production such a search is feasible, and indeed can be performed graphically. After presenting a search procedure, we apply it to an example with multiple equilibria. It is hoped that study of the simple two factor model will provide insight into the question of non-uniqueness in more general models. |
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