gemstEndogenousProductionFunction_2_2: A General Equilibrium Model with Endogenous Production...

In GE: General Equilibrium Modeling

A General Equilibrium Model with Endogenous Production Function

Description

This is an example of the spot equilibrium path with an endogenous production function. The parameter of the production function will change with the output level.

To deal with locally or globally increasing returns to scale, we can simply use an endogenous CES-type production function instead of a production function with a more complex form.

Usage

gemstEndogenousProductionFunction_2_2(...)

Arguments

...	arguments to be passed to the function sdm2.

Examples

dst.firm <- node_new(
  "output",
  type = "CD", alpha = 5, beta = c(0.5, 0.5),
  "prod", "lab"
)

dst.consumer <- node_new(
  "util",
  type = "Leontief", a = 1,
  "prod"
)

ge <- sdm2(
  A = list(dst.firm, dst.consumer),
  B = matrix(c(
    1, 0,
    0, 0
  ), 2, 2, TRUE),
  S0Exg = matrix(c(
    NA, NA,
    NA, 1
  ), 2, 2, TRUE),
  names.commodity = c("prod", "lab"),
  names.agent = c("firm", "consumer"),
  numeraire = "lab",
  z0 = c(1, 1),
  p0 = c(1, 1),
  ts = TRUE,
  policy = list(
    function(A, state) {
      A[[1]]$alpha <- 5 * state$last.z[1]^0.1
    },
    policyMarketClearingPrice
  ),
  numberOfPeriods = 40,
  maxIteration = 1
)

matplot(ge$ts.z, type = "o", pch = 20)

GE documentation built on April 4, 2025, 5:33 a.m.