In this paper, we provide an overview of an emerging class of "monotone map methods" in analyzing distorted equilibrium in dynamic economics. In particular, we focus on proving the existence and characterization of competitive equilibrium in non-optimal versions of the optimal growth models. We suggest two alternative methods: an Euler equation method for a smooth, strongly concave environment, and a value function method for a non-smooth supermodular environment. We are able to extend this analysis to study models that allow for unbounded growth or a labor-leisure choice.
ASJC Scopus subject areas
- Decision Sciences(all)
- Management Science and Operations Research