Abstract
We present a finite system of polynomial inequalities in unobservable variables and market data that observations on market prices, individual incomes, and aggregate endowments must satisfy to be consistent with the equilibrium behavior of some pure trade economy. Quantifier elimination is used to derive testable restrictions on finite data sets for the pure trade model. A characterization of observations on aggregate endowments and market prices that are consistent with a Robinson Crusoe’s economy is also provided.
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© 2008 Springer-Verlag Berlin Heidelberg
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Brown, D.J., Matzkin, R.L. (2008). Testable Restrictions on the Equilibrium Manifold. In: Computational Aspects of General Equilibrium Theory. Lecture Notes in Economics and Mathematical Systems, vol 604. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-76591-2_2
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DOI: https://doi.org/10.1007/978-3-540-76591-2_2
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-76590-5
Online ISBN: 978-3-540-76591-2
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