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The Outlook of the Sovereign Planner: The Linear Activity Model

In: Equilibrium Models in an Applied Framework

Author

Listed:
  • Ronny Norén

    (Mid Sweden University)

Abstract

The purpose of this chapter is to formulate a linear numerical general equilibrium model. The model is essentially a Leontief type of input–output model, extended with resource constraints. In this chapter the equilibrium model is developed and analysed under conditions of competitive market behaviour. To provide the reader with an understanding of the nature of this model and its link to economic theory, the concept of welfare optimum (Pareto efficiency) and its logical relation to competitive equilibrium is used as a connecting thread between the concept of economic equilibrium and the mathematical programming formulation. The following sections will highlight the major features of the model. At the same time, the assumptions necessary to make the model operational are made explicit.

Suggested Citation

  • Ronny Norén, 2013. "The Outlook of the Sovereign Planner: The Linear Activity Model," Lecture Notes in Economics and Mathematical Systems, in: Equilibrium Models in an Applied Framework, edition 127, chapter 0, pages 9-20, Springer.
    • Handle: RePEc:spr:lnechp:978-3-642-34994-2_2
    DOI: 10.1007/978-3-642-34994-2_2
    as

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