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This 2005 volume brings together twelve papers by many of the most prominent applied general equilibrium modelers honoring Herbert Scarf, the father of equilibrium computation in economics. It deals with developments in applied general equilibrium, a field which has broadened greatly since the 1980s. The contributors discuss some traditional as well as some modern topics in the field, including non-convexities in economy-wide models, tax policy, developmental modeling and energy modeling. The book also covers a range of distinct approaches, conceptual issues and computational algorithms, such as calibration and areas of application such as macroeconomics of real business cycles and finance. An introductory chapter written by the editors maps out issues and scenarios for the future evolution of applied general equilibrium

Intro -- Contents -- Introduction -- 1 Lionel W. McKenzie -- 2 Equilibrium, Trade, and Capital Accumulation -- Equilibrium -- 3 On Equilibrium in Graham's Model of World Trade and Other Competitive Systems -- 4 Competitive Equilibrium with Dependent Consumer Preferences -- 5 Demand Theory without a Utility Index -- 6 On the Existence of General Equilibrium for a Competitive Market -- 7 Stability of Equilibrium and the Value of Positive Excess Demand -- 8 On the Existence of General Equilibrium: Some Corrections -- 9 Why Compute Economic Equilibria? -- 10 The Classical Theorem on Existence of Competitive Equilibrium -- 11 The Existence of Competitive Equilibrium over an Infinite Horizon with Production and General Consumption Sets -- Trade -- 12 Specialisation and Efficiency in World Production -- 13 Equality of Factor Prices in World Trade -- 14 Specialization in Production and the Production Possibility Locus -- 15 Matrices with Dominant Diagonals and Economic Theory -- 16 The Inversion of Cost Functions: A Counter-Example -- 17 Theorem and Counter-Example -- Growth -- 18 The Dorfman-Samuelson-Solow Turnpike Theorem -- 19 Turnpike Theorem of Morishima -- 20 Accumulation Programs of Maximum Utility and the von Neumann Facet -- 21 Capital Accumulation Optimal in the Final State -- 22 Turnpike Theorems with Technology and Welfare Function Variable -- 23 A New Route to the Turnpike -- 24 A Primal Route to the Turnpike and Liapounov Stability -- 25 Turnpike Theory, Discounted Utility, and the von Neumann Facet -- Sources -- Index.

Groups of people perform acts that are subject to standards of rationality. The book's theory of collective rationality explains how to evaluate collective acts. The people engaged in a game of strategy collectively produce an outcome, and the theory reveals what makes some outcomes solutions

Equilibrium models play a central role in modern (micro)economic analysis.
They form the basis of almost all our understanding in economics and are
increasingly being used in other fields of social science. Yet there are
numerous limitations to the equilibrium approach. To name a few: the
treatment of time, i.e., the problem of distinguishing between ?time in
models? and ?models in time?; learning process, i.e., the problem of
knowledge necessary to attain the equilibrium; equilibrium dynamics, i.e.
considering the equilibrium attainment process and not just the equilibrium
state. Many critics already drew attention to the reach and limitations of
the ?engineering approach? in economic science. It seems that the ?voice of
reason? has never been loud enough. This paper presents a review of the
above-mentioned problems.

Classical theories -- Puzzles -- Stylized facts -- What matters -- What doesn't matter -- Aspects of general equilibrium -- General utility -- Consumption smoothing -- Local substitution -- Production -- Output -- Firms -- Inputs -- Smoothed output -- Units and unit value -- Consumption -- Innovation -- Return -- Risks -- Shocks -- The match -- Sectors -- Growth -- Convergence -- Migration -- Volatility -- Business cycles -- Durables -- Inventories -- Careers -- Obsolescence -- Human capital -- Output and effort -- Unmeasured activity -- World human capital and effort -- Saving and investment -- Incomplete markets -- Money -- Inflation -- Fixed and floating exchange rates -- The great depression -- Evidence -- Issues -- Readings -- Neutral technical change

Policies affecting resource allocation across tradable sectors and those affecting the incentives to produce tradable activities are key determinants of macroeconomic balance and growth. Computable general equilibrium models have made significant contributions to both types of policies. With advancements in computing power and software, these models have become easy to implement and are now widespread. The question then is when and how to formulate them to avoid the 'black box' syndrome. This book seeks to address these issues through carefully selected essays that analyse how to model general equilibrium linkages in a single economy, across developing and developed economies, and across both micro and macro policies. Micro policies examined include tariffs quotas and VERs, the choice of taxes to maximize government revenue, migration and remittances, and the political economy of tariff setting. Applications on macro policies cover capital inflows, real exchange rate determination, and the modeling of the effects of adjustment policies on income distribution. The book provides insights on the development of a family of models for diverse policy choices, focusing on the ways to model the following: links between tradable and non-tradable activities, labor markets, and portfolio choices given limited capital mobility. Selected essays are all inspired by specific policy problems, including the adaptation to external shocks (i.e. oil), consequences of capital inflows, determinants of migration and associated remittances, the productivity of foreign aid, and rent-seeking activities under trade regimes with non-price trade restrictions. Examples in this book lay out the theoretical foundations, alongside a variety of applications, to help formulate coherent and transparent models for policy analysis. Archetype economies are extensively used to show how differences in economic structure influence the effects of policies. Graduate students and policy analysts interested in modeling will find this a useful compendium of studies