Solving Large-scale Economic Equilibrium Models through Numerical Optimization

Abstract

This study explores the formidable synergy between numerical optimization and economic equilibrium modelling, unravelling complex interactions within intricate economic systems. Through case studies, algorithms, and discussions, we showcase the practical application of numerical optimization in solving large-scale economic equilibrium models. Our investigation uncovers the power of optimization techniques in achieving efficient resource allocation, informed decision-making, and policy formulation. We delve into the implications of equilibrium solutions across diverse sectors, underscoring their role in shaping economic landscapes. This synthesis of mathematics and economics advances our understanding of economic dynamics, illuminating pathways to optimal resource utilization and strategic policy choices. As we traverse this nexus, we discover that numerical optimization fuels a transformative journey toward a more insightful and equitable economic reality.