Structure of the Intertemporal General Equilibrium Model

• Published in: Double Dividend p. 33
• Main Authors: Dale W. Jorgenson, Richard J. Goettle, Mun S. Ho, Peter J. Wilcoxen
• Format: Book Chapter
• Language: English
• Published: The MIT Press 29.11.2013
• Subjects: Aggregate economy; Applied sciences; Behavioral sciences; Business; Business administration; Business economics; Business management; Capital accumulation; Capital income; Capital investments; Capital management; Capital stocks; Commercial production; Commodities; Demand; Economic disciplines; Economics; Energy; Engineering; Equilibrium models; Finance; Financial economics; Financial instruments; Financial securities; General equilibrium model; Housing demand; Industrial engineering; Industrial output; Industrial products; Leisure studies; Macroeconomics; Manufactured products; Manufacturing; Manufacturing engineering; Market economics; Market equilibrium; Physical sciences; Physics; Production factors; Production output; Recreation; Supply and demand
• ISBN: 9780262027090; 0262027097
• DOI: 10.7551/mitpress/9994.003.0005

The Intertemporal General Equilibrium Model (IGEM) presented in chapter 1 is a comprehensive model of the U.S. economy. The defining characteristic of a general equilibrium model is that prices are determined together with quantities through the interactions between supply and demand. In this chapter we describe the production sector that is central to the supply side of the model and the household sector that forms the core of the demand side. In the factor markets the household sector supplies capital and labor services, while the production sector demands these services as inputs. The model is completed by market-clearing conditions that