Example.MWG.15.B.1 {CGE}

Example 15.B.1 in MWG (1995)

Description

This is Example 15.B.1 in MWG (1995, P519), which is a pure exchange Cobb-Douglas 2-by-2 economy.

Usage

Example.MWG.15.B.1(
  a = 0.1,
  S0Exg = matrix(c(
    1, 2,
    2, 1
  ), 2, 2, TRUE)
)

Arguments

a

Each consumer has the Cobb-Douglas utility function x1^a*x2^(1-a).

S0Exg

exogenous supply matrix which will be passed to the function sdm.

Author(s)

LI Wu <[e-mail]>

References

LI Wu (2019, ISBN: 9787521804225) General Equilibrium and Structural Dynamics: Perspectives of New Structural Economics. Beijing: Economic Science Press. (In Chinese)

Mas-Colell, Andreu and Whinston, Michael Dennis and Green, Jerry R. (1995, ISBN: 0195073401) Microeconomic Theory. Oxford University Press (New York).

Examples

Example.MWG.15.B.1()

#####
Example.MWG.15.B.1(a = 0.2)

#####
S <- matrix(c(
  18, 72,
  40, 20
), 2, 2, TRUE)
ge <- Example.MWG.15.B.1(a = 0.2, S0Exg = S)
ge$p / ge$p[1]