CFDP 1431
Uniqueness of Equilibrium in the Multi-Country Ricardo Model
Author(s):Publication Date: July 2003
Pages: 22
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 Codes: D51, F11