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Tra (2007) normalized one price when clearing the market to ensure that the solution was stable. When I did this (by arbitrarily forcing one excess demand to be zero) it prevented convergence. I'm not sure it's needed—as many authors have noted, there may be multiple equilibria in these models—but it could be put back if I could figure out how to implement it.
The text was updated successfully, but these errors were encountered:
Tra (2007) normalized one price when clearing the market to ensure that the solution was stable. When I did this (by arbitrarily forcing one excess demand to be zero) it prevented convergence. I'm not sure it's needed—as many authors have noted, there may be multiple equilibria in these models—but it could be put back if I could figure out how to implement it.
The text was updated successfully, but these errors were encountered: