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Production, Trade, Prices, Exchange Rates and Equilibration in Large Experimental Economies

Noussair, Charles N. and Plott, Charles R. and Reizman, Raymond (2005) Production, Trade, Prices, Exchange Rates and Equilibration in Large Experimental Economies. Social Science Working Paper, California Institute of Technology , Pasadena, CA. (Unpublished)

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We study market equilibration in laboratory economies that are larger and more complex than any that have been studied experimentally to date. Complexity is derived from the fact that the economies are international in economic structure with multiple input, output, and foreign exchange markets in operation. The economies have twenty-one markets and due to the fact that they have roughly �fifty agents, the economies are characterized by several hundred equations. In spite of the complexity and interdependence of the economy, the results demonstrate the substantial power of the general equilibrium model of perfect competition to predict the direction of movement of market-level variables. Empirical patterns in the convergence process are explored and described.

Item Type:Report or Paper (Working Paper)
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Additional Information:We thank Carol McAusland, Jacob Goeree, Zheng Liu, and seminar participants at Nottingham University, the University of Amsterdam, and the Hong Kong University of Science and Technology for helpful comments. We thank Steven Tucker and Tara Larson for research assistance. Published as Noussair, C., Plott, C., & Riezman, R. (2007). Production, trade, prices, exchange rates and equilibration in large experimental economies. European Economic Review, 51(1), 49-76.
Group:Social Science Working Papers
Subject Keywords:Experiment, International trade, Exchange rates
Series Name:Social Science Working Paper
Classification Code:JEL: C9, F00
Record Number:CaltechAUTHORS:20170731-151806094
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79626
Deposited By: Jacquelyn Bussone
Deposited On:01 Aug 2017 22:59
Last Modified:03 Oct 2019 18:22

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