We study the technological pre-conditions for competitive equilibrium in a multisectoral economy where land is an essential imput. Earlier results by Bidard and Salvadori require either very low interest rates or are unable to predict the type of final demand vectors that can be supported by an equilibrium.We extend these earlier results and show that a given level and structure of final demand can be supported by equilibrium prices if there is a sufficiently strong substitution potential between labour and land inputs. Our proof is constructive: the equilibria we discuss can be computed by the Lemke Complementary Pivoting Algorithm.
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Length: 21 pages Date of creation: 2000 Date of revision:
Mar 2001 Handle: RePEc:kee:keeldp:2000/19
Contact details of provider: Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom Phone: +44 (0)1782 584581 Fax: +44 (0)1782 717577 Email: Web page: http://www.keele.ac.uk/depts/ec/cer/ More information through EDIRC
Find related papers by JEL classification: C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
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