General equilibrium models and homotopy methods

Our purpose is to argue the inevitable and lasting role which homotopy meth ods will play in both theoretical and applied economic analysis. The essenc e of our position is that large equilibrium models are needed to anticipate adjustments in the economy following policy changes or shock events, and t hat homotopy methods are needed to analyze these equilibrium models. In add ition to the computation of equilibria, homotopy methods will play an impor tant role in the study of multiplicity of equilibria, tatonnement, comparat ive statics, and market instability. (C) 1999 Elsevier Science B.V. All rig hts reserved.