Ricardo And Lemke
We study the economic mechanism which sustains the substitution of a marginal method for another when demand increases, in the presence of scarce resources. In those Ricardian dynamics, it is shown that the outgoing method is determined by the quantity side of the problem, the incoming method by the value side. That discrepancy explains both the possible failure of the dynamics and the possible occurrence of multiple equilibria. Conditions for existence, uniqueness and the working of the dynamics are stated. A parallel is drawn with the parametric Lemke algorithm used to solve linear complementarity problems.
|Date of creation:||2012|
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"The Theory of General Economic Equilibrium,"
Cambridge University Press, number 9780521265140, June.
- Christian Bidard, 2012. "The Frail Grounds of the Ricardian Dynamics," EconomiX Working Papers 2012-43, University of Paris West - Nanterre la Défense, EconomiX.
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The Manchester School of Economic & Social Studies,
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