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