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Article
Economic equilibrium and financial networks
Mathematical and Computer Modelling (1999)
  • Anna Nagurney, University of Massachusetts - Amherst
Abstract

In this paper, we consider the general economic equilibrium problem in which each agent seeks to determine his optimal composition of commodities given a fixed budget and a fixed number of each commodity in the economy. We construct the network underlying each agent's optimization problem and then derive the equilibrium conditions and the equivalent variational inequality formulation. We present certain qualitative properties of the equilibrium pattern and identify the financial network that represents the system in equilibrium. Finally, we provide a numerical example illustrating the model. This work bridges general economic equilibrium and financial networks.

Publication Date
1999
Citation Information
Anna Nagurney. "Economic equilibrium and financial networks" Mathematical and Computer Modelling Vol. 30 Iss. 7 (1999)
Available at: http://works.bepress.com/anna_nagurney/113/