Econometrica: Jul, 1983, Volume 51, Issue 4

Computable Qualitative Comparative Static Techniques

https://doi.org/0012-9682(198307)51:4<1145:CQCST>2.0.CO;2-9
p. 1145-1168

Gilbert Ritschard

This article is devoted to computable techniques for solving comparative static problems when only the sign of the partial derivatives of the model is considered. We first show how to extract unambiguously signed multipliers, or more generally qualitatively linked multipliers. This information then helps to reduce the size of the original system by means of a qualitative aggregation principle which we establish. As to the computation of solutions, a branch-and-bound algorithm is presented which considerably increases the efficiency of the Samuelson-Lancaster elimination principle. Finally we derive an efficient algorithm to check for signed determinants. The techniques are then applied to the analysis of an actual 20 equation model.