Three Essays On Applied General Equilibrium Analysis

The thesis develops three essays which involve diverse issues like the estimation of the parameters of a fully specified general equilibrium model, estimation of import and export demand elasticities with some general equilibrium (GE) closure rule and formulating a decomposition algorithm for GE models with proper structure. While the questions addressed are somewhat unrelated to each other, the essays involve issues related to models which are essentially Walrasian in nature. The three essays are: (1) "On the Estimation of General Equilibrium Models;" (2) "Estimation of Import and Export Demand Elasticities and Elasticity Pessimism;" and (3) "A Dantzig-Wolfe Type Decomposition Algorithm for General Equilibrium Models with Applications to International Trade Models.";The first essay discusses various econometric approaches to estimate simple and relatively small GE systems. We discuss both system and subsystem estimation, reviewing some of the literature on demand and production functions and suggest two types of Nonlinear Instrumental Variable Methods. We report and compare the parameter estimates obtained from both stochastic and deterministic methods for a small GE tax model of the U.S. economy, and finally evaluate alternative approaches to parameter selection.;The second essay argues that the import and export demand functions should be estimated simultaneously along with trade balance conditions which close the system, a kind of specification recognized in pure trade theory literature and empirically oriented GE models. Ignorance of this simultaneously makes the estimates biased downwards for both small and large sample cases with bearing on the issue surrounding the controversy of "elasticity pessimism.";The third essay describes the computation of general equilibrium via a fixed point decomposition procedure similar in spirit to the Dantzig and Wolfe (1961) decomposition algorithm for the solution of linear programming problems. We show that for a GE model of block diagonal structures, one can compute equilibria of the full dimensional problem by solving sequences of smaller dimensional "master" and "subproblems." Information passes between master and subproblems and the procedure is guaranteed to terminate at an approximate equilibrium without cycling. We discuss the existence and computation of such equilibria, potential applications and computational efficiency compared to the full dimensional methods.

Name thesis:degree_name

Ph D

Year dc:date.issued

1982

Author dc:creator

• Mansur, Ahsan Habib

• Economics
• Theory

Handle dc:identifier.uri

https://hdl.handle.net/20.500.14721/18078

OAI identifier oai:identifier

oai:uwo.scholaris.ca:20.500.14721/18078