unstmge.gms : Globally Unstable Equilibria
Globally Unstable Equilibria
Reference:
- Scarf, H, Some Examples of Global Instability of the Competitive Equilibrium. International Economic Review 1 (1960), 157-171.
Small Model of Types: MPSGE mcp
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$TITLE Globally Unstable Equilibria (UNSTMGE,SEQ=155)
$Ontext
Globally Unstable Equilibria
Scarf, H, Some Examples of Global Instability of the Competitive
Equilibrium. International Economic Review 1 (1960), 157-171.
$Offtext
set i index of consumers and goods /i1*i3/;
scalar sigma elasticity of substitution /0.8/,
alpha budget share of commodity 1 /0.9/,
a scarf's parameter a,
b scarf's parameter b
index stability index (negative=unstable);
a = (1-sigma) / sigma;
b = alpha / (1 - alpha);
index = (a + 1) / (a - 1) - b;
display a, b, index;
$ontext
$MODEL:UNSTABLE
$COMMODITIES:
P(I)
$CONSUMERS:
AGENT(I)
$DEMAND:AGENT(I) s:SIGMA
E:P(I) Q:1
D:P(I) Q:ALPHA
D:P(I++1) Q:(1-ALPHA)
$offtext
$sysinclude mpsgeset unstable
option seed = 1001;
p.l(i) = uniform(0,1);
$include UNSTABLE.GEN
solve unstable using mcp;
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