unstmge.gms : Globally Unstable Equilibria

Description

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


Category : GAMS Model library


Main file : unstmge.gms

$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.

Keywords: mixed complementarity problem, general equilibrium model, global
          instability, GAMS - MPSGE framework
$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;