The advantage of avoiding the Armington assumption in multi-region models

摘要: Abstract Most computable general equilibrium models that describe interactions between multiple regions employ the so-called Armington assumption goods are produced in different imperfect substitutes for each other. The paper describes an alternative algorithm based on of perfect substitutability accommodates observation region produces all traded goods. For with many and less-that-perfectly mobile factors, greatly reduces convergence time. is illustrated by comparing two static multi-region 50 U.S. states District Columbia, without assumption. model then extended to a dynamic 51-region agents have foresight over 6 periods.