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A Portfolio Equilibrium Model of Gold and Capital in an Integrated Walrasian General Equilibrium and Neoclassical Growth Theory

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, Japan.)

Abstract

Purpose: This paper proposes a dynamic portfolio equilibrium growth model to examine the relationship between growth and inequality by integrating the Walrasian general equilibrium and neoclassical growth theories. A new aspect of the study is to determine gold value and how the value is related to growth and inequality. The economic structure and description of production technologies are based on the Walrasian general equilibrium theory and the neoclassical growth theory. Methodology: We use an alternative utility function proposed by Zhang to describe the behavior of households. We build a model for any number of types of household with endogenous wealth and gold distribution. We also provide a computational procedure for simulating model with proper initial conditions. Findings: We simulate the model for the economy with three types of households. Recommendations: We plot the motion of the economic system, identify the existence of a unique stable equilibrium point, and carry out comparative dynamic analysis with regard to changes in some parameters.

Suggested Citation

  • Wei-Bin Zhang, 2015. "A Portfolio Equilibrium Model of Gold and Capital in an Integrated Walrasian General Equilibrium and Neoclassical Growth Theory," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(12), pages 616-627, December.
    • Handle: RePEc:ijr:journl:v:3:y:2015:i:12:p:616-627
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    References listed on IDEAS

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    More about this item

    Keywords

    Walrasian general equilibrium; Neoclassical growth theory; Gold value;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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