General financial equilibrium with policy interventions: a variational inequality approach (Q1308662)

A model for the analysis of a general financial equilibrium with policy intervention (takes and price ceilings) is presented, which yields the optimal composition of assets and liabilities in each sector's portfolio as well as the market prices for each instrument. The variational inequality formulation of the equilibrium conditions is derived and then utilized to establish existence and uniqueness properties. An algorithm is proposed. Finally, the algorithm is used for solving some special problems.