General disequilibrium with log-linear prices
AbstractThis paper presents a framework for estimating non-Walrasian models with many markets based on the virtual price approach in Lee (1986). The paper discusses an open economy multi-market non-Walrasian model with many agents and government production. The modeling of the labor markets is built on the assumption that each combination of worker and firm is a separate micro labor market. The econometric specifcation in the paper assumes log-linear virtual prices. Despite the use of such a simple specification it is apparent that when there are a large number of markets, the computational burden of estimation becomes heavy due to the large number of possible rationing regimes. The model presented in the paper can be viewed as a basis for either doing econometric work within a multi-market representative agent framework or for developing methods for aggregating across micro markets.
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Bibliographic InfoPaper provided by University of Turin in its series Department of Economics and Statistics Cognetti de Martiis. Working Papers with number 201011.
Length: 56 pages
Date of creation: Sep 2010
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
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