Land Rents and Competitive Equilibrium
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.
|Date of creation:||2000|
|Date of revision:||Mar 2001|
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|Order Information:|| Postal: Department of Economics, Keele University, Keele, Staffordshire ST5 5BG - United Kingdom|
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