IDEAS home Printed from https://ideas.repec.org/p/ulb/ulbeco/2013-1763.html
   My bibliography  Save this paper

Generalized tâtonnement and the solution of economic models

Author

Listed:
  • Victor Ginsburgh
  • Jean Waelbroeck

Abstract

The theoretical literature on tâtonnement processes leads to the conclusion that convergence is guaranteed only urrder fairly restrictive assumptions. Recently, however, large competitive equilibrium models have been successfully solved using algorithms inspired by tâtonnement processes. This paper stresses the idea that a model builder has more freedom to set up the process than a theoretician, for whom only one assignment of prices to excess demand is reasonable; for computational purposes, any assignment is acceptable. The diagonal dominance criterion provides guidelines to set up such an assignment. It is used to show that even intractable examples of global instability can easily be solved. Copyright © 1983, Wiley Blackwell. All rights reserved

Suggested Citation

  • Victor Ginsburgh & Jean Waelbroeck, 1983. "Generalized tâtonnement and the solution of economic models," ULB Institutional Repository 2013/1763, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:ulb:ulbeco:2013/1763
    Note: FLWNA
    as

    Download full text from publisher

    File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/1763/1/generalized-tatonnement.pdf
    File Function: generalized-tatonnement
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mantel, Rolf R, 1971. "The Welfare Adjustment Process: Its Stability Properties," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(3), pages 415-430, October.
    2. Victor Ginsburgh & Jean Waelbroeck, 1981. "Activity Analysis and General Equilibrium Modelling," ULB Institutional Repository 2013/1649, ULB -- Universite Libre de Bruxelles.
    3. Ginsburgh, Victor & Waelbroeck, Jean, 1979. "A Note on the Simultaneous Stability of Tatonnement Processes for Computing Equilibria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 367-380, June.
    4. Victor Ginsburgh & Jean Waelbroeck, 1976. "Computational experience with a large general equilibrium model of the world economy," ULB Institutional Repository 2013/1931, ULB -- Universite Libre de Bruxelles.
    5. GINSBURG, Victor & WAELBROECK, Jean, 1976. "Computational experience with a large general equilibrium model," LIDAM Reprints CORE 289, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. David Gale, 1963. "A note on global instability of competitive equilibrium," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 10(1), pages 81-87, March.
    Full references (including those not matched with items on IDEAS)

    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. Demuynck, Thomas & Rock, Bram De & Ginsburgh, Victor, 2016. "The transfer paradox in welfare space," Journal of Mathematical Economics, Elsevier, vol. 62(C), pages 1-4.
    2. Tirelli, Mario & Turner, Sergio, 2010. "A social welfare function characterizing competitive equilibria of incomplete financial markets," Research in Economics, Elsevier, vol. 64(1), pages 58-65, March.
    3. Aguiar, Angel & Corong, Erwin & van der Mensbrugghe, Dominique, 2020. "The GTAP Recursive Dynamic (GTAP-RD) Model: Version 1.0," Conference papers 333133, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Erwin Corong & Thomas Hertel & Robert McDougall & Marinos Tsigas & Dominique van der Mensbrugghe, 2017. "The Standard GTAP Model, version 7," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 2(1), pages 1-119, June.
    5. Martin Bichler & Johannes Knörr & Felipe Maldonado, 2023. "Pricing in Nonconvex Markets: How to Price Electricity in the Presence of Demand Response," Information Systems Research, INFORMS, vol. 34(2), pages 652-675, June.
    6. Thijs ten Raa & Pierre Mohnen, 2009. "The Location of Comparative Advantages on the Basis of Fundamentals Only," World Scientific Book Chapters, in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 23, pages 425-446, World Scientific Publishing Co. Pte. Ltd..
    7. Polterovich, Victor & Spivak, Vladimir, 1982. "Отображения С Валовой Заменимостью В Теории Экономического Равновесия [Gross Substitutability Mappings in Economic Equilibrium Theory]," MPRA Paper 21814, University Library of Munich, Germany.
    8. Waelbroeck, Jean, 1998. "Half a century of development economics : a review based on the"Handbook of Development Economics"," Policy Research Working Paper Series 1925, The World Bank.
    9. Jun Tong & Jian-Qiang Hu & Jiaqiao Hu, 2017. "A Computational Algorithm for Equilibrium Asset Pricing Under Heterogeneous Information and Short-Sale Constraints," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(05), pages 1-16, October.
    10. Rabani, Yuval & Schulman, Leonard J., 2021. "The invisible hand of Laplace: The role of market structure in price convergence and oscillation," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    11. Zalai, Ernő, 1998. "Általános egyensúlyi modellek alkalmazása gazdaságpolitikai elemzésekre [Application of general equilibrium models to economic policy analyses]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1065-1081.
    12. Sobel, Joel, 2009. "ReGale: Some memorable results," Games and Economic Behavior, Elsevier, vol. 66(2), pages 632-642, July.
    13. N. Satyanarayana Murthy & Manoj Panda & Kirit Parikh, 2006. "CO2 Emissions Reduction Strategies and Economic Development of India," Development Economics Working Papers 22341, East Asian Bureau of Economic Research.
    14. Junyi Shen & Ken-Ichi Shimomura & Takehiko Yamato & Tokinao Ohtaka & Kiyotaka Takahashi, 2015. "Revisiting Marshallian versus Walrasian Stability in an Experimental Market," Discussion Paper Series DP2015-30, Research Institute for Economics & Business Administration, Kobe University, revised May 2016.
    15. Guilhoto, Joaquim José Martins, 2011. "Análise de Insumo-Produto: Teoria e Fundamentos [Input-Output Analysis: Theory and Foundations]," MPRA Paper 32566, University Library of Munich, Germany.
    16. Bruce F. Parsell & Alan A. Powell & Peter J. Wilcoxen, 1989. "The Reconciliation of Computable General Equilibrium and Macroeconomic Modelling: Grounds for Hope?," Centre of Policy Studies/IMPACT Centre Working Papers ip-44, Victoria University, Centre of Policy Studies/IMPACT Centre.
    17. Boussard, J.M., 1990. "Induced effects of projects, theory and practice: the case of irrigation policy in France," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 26.
    18. Warren Young, 2008. "Negishi's contributions to the development of economic analysis: Research programs and outcomes," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(2), pages 151-165, June.
    19. N. Satyanarayana Murthy & Manoj K. Panda & Kirit S. Parikh, 2006. "CO2 Emissions reduction strategies and economic development of India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2006-004, Indira Gandhi Institute of Development Research, Mumbai, India.
    20. Simina Br^anzei & Nikhil R. Devanur & Yuval Rabani, 2019. "Proportional Dynamics in Exchange Economies," Papers 1907.05037, arXiv.org, revised Sep 2023.

    More about this item

    Statistics

    Access and download statistics

    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:ulb:ulbeco:2013/1763. 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: Benoit Pauwels (email available below). General contact details of provider: https://edirc.repec.org/data/ecsulbe.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.