Economic Equilibrium Research Articles

Indivisible goods, equilibrium and convex economies

We study the existence of competitive equilibria in economies with indivisible goods. The first result provides a novel sufficient condition for an economy with indivisible goods to have competitive equilibrium. This condition states that the cooperative game associated with the economy has a non-empty core. Crucially, this sufficient condition is also necessary when the economy is convex. This characterization implies that every two-player convex economy has at least one competitive equilibrium.

Equilibria in matching markets with soft and hard liquidity constraints

We consider a one-to-one matching with contracts model in the presence of liquidity constraints on the buyer's side. Liquidity constraints can be either soft or hard. Competitive equilibria do exist in economies with soft liquidity constraints, but not necessarily in the presence of hard liquidity constraints. The limit of a convergent sequence of competitive equilibria in economies with increasingly stringent soft liquidity constraints may fail to be a competitive equilibrium in the limit economy with hard liquidity constraints. We establish equivalence and existence results for two alternative notions of competitive equilibrium, quantity-constrained competitive equilibrium and expectational equilibrium, together with stable outcomes and core outcomes, in economies with both types of liquidity constraints. We argue that these notions of equilibrium and stability do not suffer from discontinuity problems by showing appropriate limit results.

Macroeconomic Analysis and General Economic Equilibrium of Kazakhstan

The paper studies general equilibrium in the economy of Kazakhstan. The purpose of the study is to estimate the equilibrium real interest rate for the economy within current frameworks. The IS-LMBP curves are plotted based on corresponding regression models of the real output measured by GDP. The exogenous variables are taken for the regressions according to the theoretical propositions. The quarterly data for 2008Q1-2022Q4 published in the datasets and bulletins of the Committee for Statistics and the National Bank of the Republic of Kazakhstan were used. Some consequences of the change in the exchange rate regime and in macroeconomic policy framework on macroeconomic relationships were revealed. Effectiveness of using interest rate as an instrument in maintaining inflation targeting policy is still ambiguous for the case of Kazakhstan. This study demonstrates the general equilibrium state of the national economy and specifications of the curves listed above. The results can be used to assign further the nominal interest rate using Taylor type rules

Relationship between Public Expenditure and Inflation

Effective management of inflation remains one of the arduous tasks for managers of global economies. Inflation remains a macroeconomic indicator whose management outcomes have the potential to decide the electoral fortunes of elected governments and determine the purchasing power of household incomes. The purpose of this research was to assess how a steady increase in public expenditure could impact inflationary levels. The quantitative approach to scientific inquiry was adapted and used in the research. Specifically, the cross-sectional design formed the basis of the research. Data required for the research were obtained mainly from secondary sources. These included textbooks, peer-reviewed articles published in journals and grey literature. Other sources were Google Search Engine, including Netcials, MacroTrends, and databases of the World Bank and Bank of Ghana, among other significant sources. Respective data on Ghana’s annual GDP values from 1960 through 2020, annual inflation data from 1965 through 2020, changes in annual inflation rates from 1965 through 2020, and annual public expenditure values from 1983 through 2020 were collected and used in the research. Descriptive statistics and regression models were used to describe the research variables and to evaluate their behaviour over the stated time frame on inflation. The study revealed lax monetary policy as the root cause of consistently high inflationary rates over considerable periods and remained a strong contributor to the weak purchasing power of national fiat currencies. Further, relative price distortions away from their economic equilibrium are not healthy for the economy, while disinflationary policies adapted for implementation should be contingent on the causes of inflation. The single largest cost of inflation to consumers is the erosion of income, whereas higher tax rates are not the panacea for the challenges of mounting public expenditure and public debts. Respective inflation rates recorded in Ghana during 2012 (7.13%) and 1995 (59.46%) remained the lowest and highest from 1993 through 2020. Fiscal periods 2017 through 2020, 2009 through 2012, and 2005 through 2008 recorded the respective best (9.33%), second-best (11.46%) and third-best (13.32%) annual average inflation rates. With the exception of 2013 through 2016, the performance of the Ghanaian economy in relation to annual average inflationary control witnessed improvements during the second political and administrative terms compared to the first terms. However, the best annual average inflation rate over an eight-year period during the Fourth Republic was recorded from 2009 through 2016 (13.45%). Findings from the research revealed a positive and significant relationship between public expenditure and inflation (coefficient value = 1.2004653; p = 0.004, p < 0.05). Public expenditure accounted for 21.30% of the variation in inflation rate from 1983 through 2020. Results from the statistical output validated the significant influence of public expenditure on inflationary hikes, the need for monetary and fiscal policies related to inflation control to be strategically reviewed and strengthened to improve implementation outcomes, and the potential of rising public expenditure to undermine the rigidity and robustness of economic fundamentals through an unexpected surge in inflationary levels. The findings underscored the need for managers of various global economies to be keen on “economic” public expenditure to the neglect of profligate public expenditure, so the socio-economic derivatives from investments in public infrastructure would strongly add to, rather than subtract from, national development and growth efforts. The fundamental objective of MPC should be pivoted around three cardinal functions: the creation of maximum employment, moderation of long-term interest rates and ensuring price stability. Excessive public expenditure requires careful consideration by economies that whet their national development appetite with increased public infrastructure projects.

Equilibria in abstract economies with a continuum of agents with discontinuous and non-ordered preferences

This paper focus on the problem of the existence of an equilibrium in abstract economies and exchange economies. Spanning over the literature we have managed to extend and generalize some previous results. In particular, we generalize the main theorem of Yannelis (1987) on the existence of an equilibrium in an abstract economy with a continuum of agents, by allowing for discontinuous preferences. As a corollary of this result, we extend the finite agent Cournot–Nash equilibrium existence theorems with discontinuous preferences (e.g., Reny, 1999; Bareli and Meneghel, 2013; He and Yannelis, 2016; among others), to a continuum of agents. We also obtain an existence theorem for an abstract economy which allows for a convexifying effect on aggregation and nonconvex strategy and constraint sets. Furthermore, our new main theorem is used to prove the existence of a Walrasian equilibrium with a continuum of agents with discontinuous, non-ordered, interdependent and price-dependent preferences and thus extending the results of Aumman (1966) and Schmeidler (1969).

Recent advances on testability in economic equilibrium models

The revealed preference program started by Paul Samuelson brought a Popperian view of what constituted true scientific discovery to economic theory.11Samuelson (1938). In his Foundations, Samuelson states that “meaningful theorems” are hypotheses “about empirical data which could conceivably be refuted”.22See Samuelson (1947), p. 4. He worried that by appealing to unobservable fundamentals such as preferences, the body of economic theory built upon the premise of rational individual choice lacked a scientific foundation.While the program quickly succeeded in providing an empirical counterpart for the individual choice problem, its application to social outcomes, namely market interactions and games, proved more difficult, and only in the 1990s did the profession start to develop the testable implications of equilibrium concepts in these contexts. Carvajal et al. (2004) covered the early literature that followed the seminal contributions of Brown and Matzkin (1996) and Sprumont (2000). This survey is an update on the state of that literature covering the results of the last two decades. As the reader will see, the Journal of Mathematical Economics has played a key role in developing these ideas.

Smallholder livestock farming in the face of climate change: Challenges in the Raya Alamata district of Southern Tigray, Northern Ethiopia

AbstractSmallholder livestock farming is a crucial component of African economies, particularly south of the Sahara, sustaining millions of farmers and bolstering food security continent‐wide. Our study investigates into the effects of climate change on smallholder livestock farmers in northern Ethiopia's Raya Alamata district, investigating how farmers are adapting to evolving conditions. A field survey encompassing 177 households within three rural communities, coupled with statistical analysis, revealed that droughts strike once every three seasons, causing water and forage shortages, rangeland deterioration and a surge in livestock diseases and deaths. In seasons marked by dryness and heat, the incidence of livestock illness increased markedly, and daily milk yield per cow plummeted from 4 to 1.66 litres. In response, local farmers have transitioned from open grazing to stall‐feeding, heavily dependent on costly market‐bought feeds. Other significant adaptive measures include providing shelter, bathing livestock during heatwaves and practicing transhumance. To enhance resilience to these issues, we advocate for improved environmental conservation, better access to climate data and resources, better animal health care, and subsidized and readily available feed. Our research underscores the profound adversities confronting smallholder livestock farmers in northern Ethiopia due to climate change, implications that extend to food security and the economic equilibrium of the area and beyond.

Dynamics of dispersal: Modeling the impact of dandelion proliferation on environmental and economic equilibria

Dandelion, with its unique wind dispersal mechanism, can easily spread its seeds across vast land areas, encroaching on territories of other creatures. To address this issue, two models are considered: The first model considers wind patterns, temperature, and moisture in dandelion growth, using differential equations to analyze population changes over time. Sensitivity analysis reveals the models responsiveness to these factors. The second model combines ecological and economic factors to assess the impact of invasive species, employing fuzzy mathematics to determine the severity of impact. The study identifies Canada Goldenrod as particularly destructive. These models offer insights for future invasive species management policies, showcasing innovations in incorporating partial differential functions and fuzzy mathematics for more accurate estimations.

Agile Transformation through the Performing Management of It and Cyber Security Projects, at the Government Level

Abstract Modern theories of intelligence have developed from the observation that the person, throughout life, is in constant development. In order to be successful, certain conditions must be met. These conditions for achieving success in life depend on the skills that are formed during formal education, or at least should be pursued as goals, beyond the disciplines. In a current information society, the quality of life as well the perspectives of social change and economic development depend on information and its exploitation, especially in the institutional field of managing computer applications for the absorption of European funds, becoming a matter of national importance, with critical values for national security, characterized by the state of economic equilibrium. Scientific knowledge and information are of particular importance in the global information society by: supporting innovation through technology, promoting economic development through the use of emerging technologies, making decisions efficiently and transparently at government level. The implementation and use of intelligent technologies have a decisive role in the development of the degree of digitization of public services through non-refundable funding from European funds and the National Recovery and Resilience Plan. The reinvention of the government can be transformed into a reality through the digitization and computerization of the public administration, assuming the modernization of the infrastructure through specific sources of funding, such as European funds, ensuring security through advanced cyber protection and defense capabilities against possible vulnerabilities, risks or cyber-attacks. Achieving performance within the public institution requires an increased concern for innovation, creativity and change.

GENERAL ECONOMIC EQUILIBRIUM MODELS

The article examines the possibilities and limitations of empirical models of general economic equilibrium and makes their classification. Computable general equilibrium models are divided into two groups: the first group is based on the equilibrium price model (G. Scarf's approach), the second is based on a multi-sectoral model of economic growth (L. Johansen's approach). Dynamic stochastic general equilibrium models are also divided into two groups: the first group is based on the model of the real business cycle (the approach of F. Kydland and E. Prescott), the second is based on the model of various behavior of firms in conditions monopolistic competition (the approach of J. Rotemberg and M. Woodford). Within each group, empirical models were studied according to the following criteria: the scale of the economy, its openness; application for current and future assessments; socio-economic phenomenon under study.

Advances in Artificial Intelligence for Infectious Disease Surveillance in Livestock in Zambia

The global livestock industry grapples with formidable challenges stemming from the escalation and dissemination of infectious diseases. Zambia, an agricultural cornerstone where livestock is pivotal for economic sustenance and food security, confronts the imperative task of effectually surveilling and managing infectious diseases. This study investigates into the possibilities of the application of artificial intelligence (AI) for infectious disease surveillance in the Zambian livestock sector. The study meticulously scrutinizes the prevailing state of infectious disease surveillance, evaluates the latent capabilities of AI technologies, and critically discusses the intricate landscape of challenges and opportunities entailed in their implementation. In the intricate tapestry of Zambia's economy, livestock farming assumes a central and irreplaceable role, contributing substantially to the well-being and livelihoods of a significant portion of the populace. However, the omnipresent specter of infectious diseases perpetually menaces livestock health, casting a shadow on productivity and economic equilibrium. Conventional methodologies in disease surveillance exhibit inherent shortcomings, characterized by delays in reporting and inherent inaccuracies. This study is an exploration of possibilities of the AI applications designed to fortify infectious disease surveillance within Zambia's livestock domain. The infusion of AI technologies holds the transformative potential to reshape disease monitoring paradigms, enabling early detection and facilitating swift response strategies in the face of emerging threats. The ensuing critical analysis navigates the intricate terrain of the application of AI in the Zambian livestock context, shedding light on its promising prospects, while pragmatically addressing the hurdles that may accompany its incorporation.

Cross‐ownership, business dynamism, and wage inequality in general equilibrium

AbstractThis study examines the distributive and welfare effects of cross‐ownership by firms in a general equilibrium economy on the product and factor markets. The cross‐ownership of equities, such as collusion, tends to be anticompetitive, thereby narrowing the wage gap between skilled and unskilled labor in the short term with the existing number of firms. In the capital market, reducing capital cost through cross‐ownership causes new firms to enter the market in the long term. This firm‐entry effect induced by cross‐ownership through an increase in the number of competitors generates a competitive force that exacerbates wage inequality and reduces welfare in the economy.

Vector Equilibrium Problems—A Unified Approach and Applications

We present existing results and properties for the solutions of some vector equilibrium problems with set-valued functions in the case of a vector space ordered by a cone with some “interiority” properties. Some applications concerning the existence of equilibrium for abstract economies and vector optimization problems are given.

Methodological bases for balanced development of the food supply of the population

A retrospective analysis of the economic theories of marginal utility, general economic equilibrium, spatial economics, production factors, and organization theory was carried out from the position of forming the methodological basis for the emergence of the theory of balanced development of food supply for the population. The substantive aspects of the critical concepts of the identified theories are detailed in their influence on the formation and formation of the methodology for food supply to the population, including maintaining a balanced and equilibrium state in the conditions of continuous influence of external factors on food systems. For each identified theory, provisions have been established that determine the relationship with the methodology of the area under study. It has been established that the emergence of the theory and methods of balanced development of food supply for the population is a natural stage in the evolution of economic science in the context of increasing the role and importance of man in the modern economy. The methodological grounds identified are the need to achieve and maintain a balanced human diet, ensure coordination and maintain a balance of social and economic interests of consumers and food producers, ensure a balanced state of food production and consumption, maintain a balance of resource capabilities and future food needs of people, prevent the emergence of imbalances in the food sector. The work results can be used to develop new conceptual frameworks for developing the domestic agro-industrial complex and allow us to form a more holistic and detailed understanding of the specifics and features of achieving balanced agri-food sector development.

Pareto’s legacy in the Italian tradition: the case of mathematical economics

Pareto’s personality had a great influence on the evolution of economic theory in the last century at least in the Italian context. At the beginning of the twentieth century a small but combative circle of followers aimed to defend and spread the new Paretian approach based on the idea of general economic equilibrium. Paretian scholars were well recognizable in the Italian context for their contributions to mathematical and statistical aspects. The purpose of this contribution is to outline the essential features of the Italian Paretian school in the field of pure economics or as we would say today of mathematical economics. This favorable position of the Italian tradition in the field of mathematical economics was basically due to two circumstances. The first was represented by the legacy of Pareto and his school while the second was to be found in the fact that among the students of Pareto there was a pure mathematician of great value Luigi Amoroso. We see then that an important voice even if poorly valued was that of Bruno de Finetti who published a remarkable series of articles on mathematical economics in the second half of the 1930s. After World War II the Paretian tradition in this field weakened considerably and effectively disappeared internationally.

Quantification of sectoral impact of COVID-19 on Indian economy: an application of economy-wide accounting framework

PurposeCOVID-19 has affected the economies adversely from all sides. The sudden halt in production has impacted both the supply and demand sides. It calls for analysis to quantify the impact of the reduction in economic activity on the economy-wide variables so that appropriate steps can be taken. This study aims to evaluate the sensitivity of various sectors of the Indian economy to this dual shock.Design/methodology/approachThe eight-sector open economy general equilibrium Global Trade Analysis Project (GTAP) model has been simulated to evaluate the sector-specific effects of a fall in economic activity due to COVID-19. This model uses an economy-wide accounting framework to quantify the impact of a shock on the given equilibrium economy and report the post-simulation new equilibrium values.FindingsThe empirical results state that welfare for the Indian economy falls to the tune of 7.70% due to output shock. Because of demand–supply linkages, it also impacts the inter- and intra-industry flows, demand for factors of production and imports. There is a momentous fall in the demand for factor endowments from all sectors. Among those, the trade-hotel-transport and manufacturing sectors are in the first two positions from the top. The study recommends an immediate revival of the manufacturing and trade-hotel-transport sectors to get the Indian economy back on track.Originality/valueThe present study has modified the existing GTAP model accounting framework through unemployment and output closures to account for the impact of change in sectoral output due to COVID-19 on the level of employment and other macroeconomic variables.

Navigating Disability Insurance Uptake: The Complex Interplay of Consumer Confidence, Human Capital, And Financial Perceptions

This study investigates factors associated with purchasing disability income insurance in the United States, emphasizing consumer confidence, perceived financial knowledge, and human capital. The research contextualizes disability income insurance as pivotal to financial stability, addressing the shortfall in personal safety nets and economic equilibrium. The prevalence of disabilities from common illnesses necessitates a thorough understanding of insurance mechanisms. Methods: Using the 2022 Survey of Consumer Finance data, the study employs logistic regression to evaluate the relationship between consumer confidence, financial knowledge, human capital, and sociodemographic characteristics. The methodology intricately controls for age, employment status, marital status, and race, ensuring nuanced analysis. Results: Significant differences across racial groups were identified. Asian participants exhibited the most substantial reluctance towards insurance, whereas a positive correlation between financial knowledge and insurance acquisition was found among Black individuals. Generational analysis indicated varied perceptions, with a marked decrease in insurance propensity among older White and Latino generations. Discussion: The study emphasizes the importance of financial education that caters to various communities. It highlights the significance of cultural and societal norms in financial decision-making, especially among different racial groups. The study also spotlights the role of human capital in accessing insurance, calling for policy interventions that cater to the population’s unique needs. In conclusion, this analysis affirms the significance of consumer confidence in financial decisions and advocates for culturally responsive financial education and policy-making. It also identifies critical areas for enhancing the reach and efficacy of disability income insurance to foster economic resilience and well-being.

Two-stage planning model of power-to-gas station considering carbon emission flow

The widespread use of fossil fuels has substantially contributed to global climate change. One of the most crucial ways to address climate change is to minimize carbon emissions in the energy sector. Power-to-Gas (P2G) technology provides a potential solution. In this context, this paper introduces a novel two-stage P2G planning method for the electric-gas coupling system, using carbon emission flow technology. The carbon emission flow model employed facilitates the distribution of carbon emissions across the entire energy network. Central to our planning strategy is the identification of nodes with reduced carbon emissions for the siting of P2G facilities, predicated on the premise that such nodes are indicative of significant renewable energy utilization. Constructing P2G systems at these particular nodes is strategically advantageous for augmenting renewable energy consumption. In the initial phase, a P2G siting planning methodology predicated on a low-carbon criterion is advanced, resulting in a definitive siting scheme. Subsequently, the second phase involves establishing a P2G capacity optimization model that seeks to strike an economic equilibrium between the utilization of surplus wind power and P2G operational investment. An enhanced pigeon optimization algorithm is employed to resolve the proposed model. Our method is verified by simulation. Compared with other conventional models, the accommodation capacity of renewable energy with the proposed method is enhanced, and the carbon emissions and operating costs of IES are also reduced.

Community Involvement and the Use of Coffee Exocarp as a Growth Medium for Cajuput Plantation in Post-Mining Land Reclamation in PT Bukit Asam Tbk (PTBA)

The cajuput plant (Melaleuca cajuputi) is valued for its essential oil production and its ability to thrive in challenging environments, including post-mining lands. PT Bukit Asam Tbk (PTBA) has cultivated this plant extensively to supply seeds for reclamation projects on former mine sites, along with the provision of location-specific fertilizers. This study aims to identify the new alternative organic materials, determining the optimal formula for plant growth media and also to measure the tangible and intangible impacts of the community involvement. Following the implementation of statistical testing involving the analysis of variance model (ANOVA) and subsequent test, which is the least significant difference (LSD) test, definitive findings reveal that incorporating coffee exocarp as a growth medium significantly impacts the elevation of plant height and the augmentation of Cajuput leaf count. The most efficacious treatment is delineated as P2, characterized by a 1:1 composition of coffee exocarp and soil. The involvement of the local community has precipitated several advantageous outcomes, encompassing the creation of employment opportunities, the facilitation of economic equilibrium, and the development of smallholder forestry enterprises within the local community.

The Role of Zakat in Automatic Equilibrium in the Islamic Economy Using the input-output Model

The study aimed to elucidate the role of Zakat in contributing to achieving automatic equilibrium in the economy quantitatively through the use of the input-output model. The study relied on a descriptive approach involving the analysis of quantitative data relevant to the discussion. The study addressed the effectiveness and efficiency of financial instruments of public policy and their role in contributing to achieving automatic equilibrium in both traditional and Islamic economies.
 The study concluded that Zakat has an impact on increasing total demand as measured quantitatively using the input-output model, which works to establish automatic equilibrium in the economy. The study recommended the inclusion of Zakat as a financial tool utilized by the state in its public policies to achieve its economic and social objectives, ensuring the attainment of economic equilibrium. Additionally, it suggested the possibility of employing quantitative methods and mathematical models to study the behavior of economic variables in the Islamic economy.