COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1426

Indeterminacy, Nonparametric Calibration and Counterfactual Equilibria

June 2003

Donald J. Brown
Cowles Foundation, Yale University
Ravi Kannan
Department of Computer Science, Yale University

We propose a nonparametric approach to multiple calibration of numerical general equilibrium models, where counterfactual equilibria are solutions to the Walrasian inequalities. We present efficient approximation schemes for deciding the solvability of Walrasian inequalities.

Keywords: Applied general equilibrium analysis, Walrasian inequalities, O-minimal structures, Monte Carlo algorithms

JEL Classification: C62, C63, D51, D58