| Comparative Statics |
| Economic models have two types of variables: endogenous variables, whose values the model is designed to explain, and exogenous variables, whose values are taken as given from outside the model. The solution values we obtain from the endogenous variables will typically depend on the values of the exogenous variables, and a central part of the analysis will often be to show how the solution values of the endogenous variables change with changes in the exogenous variables. This is the problem of comparative-static equilibrium analysis or comparative statics. However, does there exist the problem of cs equilibrium analysis in our life? If so, how can we define it? What are the endogenous and exogenous variables? And what are the things that we can control and what are not? Even if we can define it, can we solve it anyway? THINKing... |


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