Comparative Statics andthe Concept of Derivative推荐.pdfVIP

Chapter Comparative Statics and the Concept of Derivative This chapter and Chaps. 7 and 8 will be devoted to the methods of cornparatv(;-~tatic anJly~is. 6.1 The Nature of Comparative Statics Comparative statics, as the name sl1ggests. is conccrm:d with the comparitlon of dift~rcnt eqUIlibrium states that arc associated with different sets of values of parumeters and ex- ogenous variabb. Forpurroscs OfSllCh a comparison, we ahvays start by a~suming ,\ glvcn initial equilibrium state. In the isolated-market model, for example, such an initial equi- librium will be n.:pre~ent\.!d by a determinate price p~ and a corresponding quantity Qt. Similarly, in the ~imple national-income model ~)f (3.23), the initial equilibrium will be specified by a dctcrminat.; y~ and il corresponding C. Now if we let a di~equilibrating change occur in the model in the form of a change in the value of some parameter ot exogenous variable the initial equilibrium , ill, of course, be upset. As a result, the vari· ou~ endogen()us variablc~ must ullderg~) certain adjustments. If it is a~~urned th,!t a nc\~ equilibrium state relevant 10 the new values of the data can be defined and attained, the question posed in the comparative.static analysis is: ITow would the new cquilibrium com- pare with the old? Jt should be noted that in comparative statks we still disregard the process of adju~tmenl of the variable,; wc merely compare the initial (prechange} equilibrium state with the final (pos