Abstract
An algorithm is presented for computing equilibria in a linear monetary economy, that is, an exchange economy in which all individuals have linear utility functions and in which goods are bought and sold only in exchange for money. The algorithm computes the equilibrium prices by solving a finite sequence of linear programming problems.
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References
R.W. Clower, “A reconsideration of the microfoundations of monetary theory”,Western Economic Journal 6 (1967) 1–9.
B.C. Eaves, “A finite algorithm for the linear exchange model”,Journal of Mathematical Economics 3, (1976) 197–203.
R.B. Myerson, “A simple model of the dynamic economy”, DP# 381, Center for Mathematical Studies in Economics and Management Science, Northwestern University (1979).
H. Scarf,The computation of economic equilibria (Yale University Press, New Haven, 1973).
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Myerson, R.B. An algorithm for computing equilibria in a linear monetary economy. Mathematical Programming 21, 182–189 (1981). https://doi.org/10.1007/BF01584239
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DOI: https://doi.org/10.1007/BF01584239