DYNAMIC POSITIVE EQUILIBRIUM PROBLEM

The Dynamic Positive Equilibrium Problem (DPEP) is a methodology for dealing with time series about economic agentsÂ’ decisions, regardless of the amount of available information. The approach is articulated in three phases, as in the static counterpart Symmetric Positive Equilibrium Problem (SPEP), with the variant that it must be preceded by the estimation of the equation of motion which characterizes a dynamic model. Furthermore, the definition of marginal cost in the DPEP model is different from the same notion in the static SPEP. In this paper, the DPEP approach was applied to a panel data dealing with annual crops from California agriculture for a horizon of eight years. The dynamic character of the DPEP model is based upon then assumption of output price adaptive expectations that follows a Nerlove-type specification.


Issue Date:
2001
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/11956
Total Pages:
37
Series Statement:
Working Paper 01-005




 Record created 2017-04-01, last modified 2017-08-23

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