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Charles A. Wilson Publications

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Abstract

We present two arguments, one based on index theory, demonstrating that the multi-country Ricardo model has a unique competitive equilibrium if the aggregate demand functions exhibit gross substitutability. The result is somewhat surprising because the assumption of gross substitutability is sufficient for uniqueness in a model of exchange but not, in general, when production is included in the model.

Keywords: Ricardo model, Gross substitutes, Uniqueness

JEL Classification: D51, F11