IDEAS home Printed from https://ideas.repec.org/p/ags/uerssr/277892.html
   My bibliography  Save this paper

Equilibrium Price Solution Of Net Trade Models Using Elasticities

Author

Listed:
  • Seeley, Ralph

Abstract

This report shows a solution procedure which can rapidly calculate equilibrium world prices in a large, complex net trade model. The "elasticity solution procedure" works for a model in which price elasticities are fairly stable over time and various prices. The model must accept a world price vector and return a residual world net trade vector. The procedure automatically stays in the region of positive prices and quantities. It builds a complete information set of own- and cross-price elasticities to fit the model's behavior. The procedure runs on the IIASA and GOL world agriculture models with sharp improvements in convergence time over Walrasian tAtonnement and gradient search, and moderate improvements over Newton's method. The procedure can reconcile inconsistent trade estimates made by country analysts.

Suggested Citation

  • Seeley, Ralph, 1986. "Equilibrium Price Solution Of Net Trade Models Using Elasticities," Staff Reports 277892, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:277892
    DOI: 10.22004/ag.econ.277892
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/277892/files/ers-report-247.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.277892?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Conlisk, John, 1973. "Quick Stability Checks and Matrix Norms," Economica, London School of Economics and Political Science, vol. 40(160), pages 402-409, November.
    2. A. P. Lerner, 1933. "The Diagrammatical Representation of Elasticity of Demand," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 1(1), pages 39-44.
    3. Seeley, Ralph, 1985. "Price Elasticities From The Iiasa World Agriculture Model," Staff Reports 277684, United States Department of Agriculture, Economic Research Service.
    4. Liu, Karen, 1985. "A Grain, Oilseeds, and Livestock Model of Japan," Staff Reports 277786, United States Department of Agriculture, Economic Research Service.
    5. Brandsma, Andries S. & Hughes Hallett, A. J. & van der Windt, Nico, 1983. "Optimal control of large nonlinear models: An efficient method of policy search applied to the Dutch economy," Journal of Policy Modeling, Elsevier, vol. 5(2), pages 253-270, June.
    6. Roningen, Vernon O. & Wainio, John & Liu, Karen, 1985. "The World Grain, Oilseeds, And Livestock Model--A Microcomputer Version," Staff Reports 277806, United States Department of Agriculture, Economic Research Service.
    7. Liu, Karen, 1985. "USDA's World Grain, Oilseeds, and Livestock (GOL) Model," 1985: Agricultural Trade Modeling - The State of Practice and Research Issues Meeting, December 1985, Vancouver, British Columbia, Canada 50634, International Agricultural Trade Research Consortium.
    8. Robert S. Holbrook, 1974. "A Practical Method for Controlling a Large Nonlinear Stochastic System," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 1, pages 155-175, National Bureau of Economic Research, Inc.
    9. Saari, Donald G, 1985. "Iterative Price Mechanisms," Econometrica, Econometric Society, vol. 53(5), pages 1117-1131, September.
    10. Liu, Karen & Roningen, Vernon O., 1985. "The World Grain-Oilseeds-Livestock (Gol) Model, A Simplified Version," Staff Reports 277671, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Seeley, Ralph, 1998. "Using the Linker: Output, Input, and Operation," Staff Reports 278828, United States Department of Agriculture, Economic Research Service.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gardiner, Walter H. & Dixit, Praveen M, 1987. "Price Elasticity of Export Demand: Concepts and Estimates," Foreign Agricultural Economic Report (FAER) 305286, United States Department of Agriculture, Economic Research Service.
    2. Araji, A. A. & White, F. C., 1991. "Return To Public Investment And The Benefit Of Research To Consumers And Producers Of Wheat," A.E. Research Series 305083, University of Idaho, Department of Agricultural Economics and Rural Sociology.
    3. Sah, Raaj, 2000. "Some results for the comparative statics of steady states of higher-order discrete dynamic systems," Journal of Economic Dynamics and Control, Elsevier, vol. 24(10), pages 1481-1489, September.
    4. van der Laan, G. & Talman, A.J.J., 2002. "Dynamic Adjustment of Supply Constrained Disequilibria to Walrasian Equilibrium," Other publications TiSEM 8c5d443d-92c8-4e82-bcef-3, Tilburg University, School of Economics and Management.
    5. Hommes, Cars & Huang, Hai & Wang, Duo, 2005. "A robust rational route to randomness in a simple asset pricing model," Journal of Economic Dynamics and Control, Elsevier, vol. 29(6), pages 1043-1072, June.
    6. Herings, Jean-Jacques & van der Laan, Gerard & Talman, Dolf & Venniker, Richard, 1997. "Equilibrium adjustment of disequilibrium prices," Journal of Mathematical Economics, Elsevier, vol. 27(1), pages 53-77, February.
    7. Sjur Didrik Flåm, 2013. "Reaching Market Equilibrium Merely by Bilateral Barters," CESifo Working Paper Series 4504, CESifo.
    8. Goeree, Jacob K. & Hommes, Cars & Weddepohl, Claus, 1998. "Stability and complex dynamics in a discrete tatonnement model," Journal of Economic Behavior & Organization, Elsevier, vol. 33(3-4), pages 395-410, January.
    9. Herbert Gintis & Antoine Mandel, 2012. "The Stability of Walrasian General Equilibrium," Documents de travail du Centre d'Economie de la Sorbonne 12065r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Apr 2013.
    10. Tamotsu Onozaki, 2018. "Nonlinearity, Bounded Rationality, and Heterogeneity," Springer Books, Springer, number 978-4-431-54971-0, June.
    11. Gregory C. Chow, 1980. "Comparison of Econometric Models by Optimal Control Techniques," NBER Chapters, in: Evaluation of Econometric Models, pages 229-243, National Bureau of Economic Research, Inc.
    12. Kenneth Fjell & Debashis Pal, 2021. "Adjusted repeated myopic use of the inverse elasticity pricing rule," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(5), pages 559-565, October.
    13. Andrés Vázquez, 1995. "A note on the arc elacticity of demand," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 10(2), pages 221-228.
    14. , J. & ,, 2012. "Designing stable mechanisms for economic environments," Theoretical Economics, Econometric Society, vol. 7(3), September.
    15. Ahmad K. Naimzada & Serena Sordi, 2018. "On controlling chaos in a discrete†time Walrasian tâtonnement process," Metroeconomica, Wiley Blackwell, vol. 69(1), pages 178-194, February.
    16. Edoardo Gaffeo & Mauro Gallegati & Umberto Gostoli, 2015. "An agent-based “proof of principle” for Walrasian macroeconomic theory," Computational and Mathematical Organization Theory, Springer, vol. 21(2), pages 150-183, June.
    17. Cavalli, Fausto & Naimzada, Ahmad, 2015. "A tâtonnement process with fading memory, stabilization and optimal speed of convergence," Chaos, Solitons & Fractals, Elsevier, vol. 79(C), pages 116-129.
    18. Herrmann, John D. & Kahn, Peter J., 1999. "A continuity property for local price adjustment mechanisms," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 419-453, May.
    19. Gregory Chow, 1976. "An Approach to the Feedback Control of Nonlinear Econometric Systems," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 3, pages 297-309, National Bureau of Economic Research, Inc.
    20. Ingrid Kubin & Laura Gardini, 2013. "Border collision bifurcations in boom and bust cycles," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 811-829, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uerssr:277892. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ersgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.