S. B. Vasilyev, N. P. Pilnik, S. A. Radionov, “The relaxation of complementary slackness conditions in dynamic general equilibrium models”, Mat. Model., 2018, Volume 30, Number 12,Pages <nobr>111

This article is cited in 1 paper

The relaxation of complementary slackness conditions in dynamic general equilibrium models

S. B. Vasilyev^abc, N. P. Pilnik^abd, S. A. Radionov^adb

^a National Research University Higher School of Economics
^b Federal Research Center «Computer Science and Control» of the RAS
^c Lebedev Physical Institute of the Russian Academy of Sciences
^d Financial Research Institute of the Ministry of Finance of the Russian Federation

Abstract: In this article we propose the description and the rationale of the heuristic approach, which can be used in applied dynamic economic models containing agents' optimization problems. Solution of these problems leads to a system containing differential and algebraic equations, inequalities and complementary slackness conditions. These conditions significantly complicate the analysis of such models even on the calibration stage. In this article we show how the natural assumption of the alternation of regimes, which are defined by a way of complementary slackness conditions resolution, leads to relations which are more regular and convenient from the point of model calibration.

Keywords: general equilibrium, dynamic models, optimality principle, bank model, complementary slackness conditions.

Received: 07.11.2017