Applied general equilibrium

In mathematical economics, applied general equilibrium (AGE) models were pioneered by Herbert Scarf at Yale University in 1967, in two papers, and a follow-up book with Terje Hansen in 1973, with the aim of empirically estimating the Arrow–Debreu model of general equilibrium theory with empirical data, to provide '“a general method for the explicit numerical solution of the neoclassical model”(Scarf with Hansen 1973: 1)Brouwer's Fixed Point theorem states that a continuous mapping of a simplex into itself has at least one fixed point. This paper describes a numerical algorithm for approximating, in a sense to be explained below, a fixed point of such a mapping (Scarf 1967a: 1326). In mathematical economics, applied general equilibrium (AGE) models were pioneered by Herbert Scarf at Yale University in 1967, in two papers, and a follow-up book with Terje Hansen in 1973, with the aim of empirically estimating the Arrow–Debreu model of general equilibrium theory with empirical data, to provide '“a general method for the explicit numerical solution of the neoclassical model”(Scarf with Hansen 1973: 1)