scholarly journals SUNSPOTS AND CREDIT FRICTIONS

2012 ◽  
Vol 17 (5) ◽  
pp. 1055-1069 ◽  
Author(s):  
Sharon G. Harrison ◽  
Mark Weder
Keyword(s):  
Business Cycles ◽  
General Equilibrium ◽  
Utility Function ◽  
Equilibrium Model ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Increasing Returns To Scale ◽  
Collateral Constraints ◽  
Collateral Constraint ◽  
Credit Frictions

We examine a general equilibrium model with collateral constraints and increasing returns to scale in production. The utility function is nonseparable, with no income effect on the consumer's choice of leisure. Unlike this model without a collateral constraint, we find that indeterminacy of equilibria is possible. Hence, business cycles can be driven by self-fulfilling expectations. This is the case for more realistic parameterizations than in previous, similar models without these features.

ASSET PRICING IN DYNAMIC STOCHASTIC GENERAL EQUILIBRIUM MODELS WITH INDETERMINACY

2007 ◽  
Vol 12 (1) ◽  
pp. 50-71 ◽  
Author(s):  
NATALIA GERSHUN ◽  
SHARON G. HARRISON
Keyword(s):  
Asset Pricing ◽  
General Equilibrium ◽  
Returns To Scale ◽  
Dynamic Stochastic General Equilibrium ◽  
Increasing Returns ◽  
Dsge Model ◽  
Increasing Returns To Scale ◽  
Local Indeterminacy ◽  
Dynamic Stochastic ◽  
The One

We explore asset pricing in the context of the one-sector Benhabib-Farmer-Guo (BFG) model with increasing returns to scale in production and compare our results with financial implications of the standard dynamic stochastic general equilibrium (DSGE) model. Our main goal is to determine the effects of local indeterminacy and the presence of sunspot shocks on asset pricing. We find that the BFG model does not adequately represent key stylized facts of U.S. capital markets and does not improve on the asset-pricing results obtained in the standard DSGE model.

Globalization, Consumer's Preference, and Welfare in India

2015 ◽  
pp. 109-133
Author(s):  
Koushik Das
Keyword(s):  
General Equilibrium ◽  
Market Structure ◽  
Computable General Equilibrium ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Competitive Market ◽  
Fixed Costs ◽  
Increasing Returns To Scale ◽  
Cge Modelling ◽  
Economy Benefit

The purpose of the present chapter is to analyse general equilibrium effects of different trade liberalization policies for India under imperfectly competitive market structure. Since present day world trade is much akin towards the increasing returns to scale and market structure oriented industry behaviour, we have considered monopolistically competitive market structure for our analysis. Computable General Equilibrium (CGE) modelling has been applied as it seems to be relevant methodology for policy simulation. Consumer's love for variety and increasing returns to scale present in the sectors involving large fixed costs, are strong determinants of consumer's as well as producer's business confidence. Our study reveals that increased welfare gain due to trade and openness is not much larger as compared to standard perfect competition scenario as the scale economy benefit is predominant only in few sectors like capital goods industries and not prominently visible in large agricultural and informal manufacturing sectors.

Globalization, Consumer's Preference, and Welfare in India

2016 ◽  
pp. 288-311
Author(s):  
Koushik Das
Keyword(s):  
General Equilibrium ◽  
Market Structure ◽  
Computable General Equilibrium ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Competitive Market ◽  
Fixed Costs ◽  
Increasing Returns To Scale ◽  
Cge Modelling ◽  
Economy Benefit

The purpose of the present chapter is to analyse general equilibrium effects of different trade liberalization policies for India under imperfectly competitive market structure. Since present day world trade is much akin towards the increasing returns to scale and market structure oriented industry behaviour, we have considered monopolistically competitive market structure for our analysis. Computable General Equilibrium (CGE) modelling has been applied as it seems to be relevant methodology for policy simulation. Consumer's love for variety and increasing returns to scale present in the sectors involving large fixed costs, are strong determinants of consumer's as well as producer's business confidence. Our study reveals that increased welfare gain due to trade and openness is not much larger as compared to standard perfect competition scenario as the scale economy benefit is predominant only in few sectors like capital goods industries and not prominently visible in large agricultural and informal manufacturing sectors.

János Kornai’s Anti-Equilibrium, a harbinger of evolutionary economics

2013 ◽  
Vol 63 (3) ◽  
pp. 367-375 ◽  
Author(s):  
Peter Mihalyi
Keyword(s):  
Decision Making ◽  
General Equilibrium ◽  
Evolutionary Economics ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Increasing Returns To Scale ◽  
Goods And Services ◽  
Production Processes ◽  
Non Linear

Anti-Equilibrium (1971) was well ahead of its time in emphasising that (i) economics should draw from biology, rather than physics, as its methodological underpinning; (ii) evolutionary logic requires a different type of decision-making in simple, routine matters, as opposed to large and important decisions; (iii) the most important production processes are non-linear, with increasing returns to scale being the rule, rather than the exception in modern capitalist economies and — in conclusion — that there is no such thing as general equilibrium. In modern societies, goods and services are either in shortage (Socialism) or in a state of oversupply (Capitalism). It is either a buyers’ market or sellers’ market.

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