REVIEW OF DEVELOPMENT ECONOMICS

Manuscript No: #0215, Acceptance Date: September 5, 2001

Walrasian Equilibrium Computation, Network Formation, and the Wen Theorem*

Shuntian Yao

RRH: WALRASIAN EQUILIBRIUM COMPUTATION
LRH: Shuntian Yao

Abstract

This paper studies the Walrasian equilibrium theory of division of labor for large economies with weakly convex production techniques and with the presence of transaction costs. The result in Wen (1998-1) is revised and generalized so that the new versions can be applied to a much larger category of economic models. With the help of a simple example, it is explained as to how the theoretical results can be used for Walrasian equilibrium computation and equilibrium network structure identification.

*Yao: Division of Applied Economics, Nanyang Business School, Nanyang Technological University, Singapore. Tel: 65 790 5559. E-mail: astyao@ntu.edu.sg
I wish to thank Mei Wen for the helpful discussion with her.

JEL Classifications: D51, C68.

Number of figures: 1

Date: January 2, 2002.

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