COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1426R

The Computation of Counterfactual Equilibria
in Homothetic Walrasian Economies

Donald J. Brown and Ravi Kannan

Revised May 2004

We propose a nonparametric test for multiple calibration of numerical general equilibrium models, and we present an effective algorithm for computing counterfactual equilibria in homothetic Walrasian economies, where counterfactual equilibria are solutions to the Walrasian inequalities.

Keywords: Applied general equilibrium analysis, Walrasian inequalities, Calibration

JEL Classification: C63, C68, D51, D58