by
Mateescu, George Daniel
Published in Romanian Journal of Economic Forecasting, 2004, volume 5 issue
1,
Basically, a “non-closed” model is a system of equations in which the number of variables is greater than the number of equations. Usually, in such a case the model becomes “closed” by adding some behavioral equations.
For a non-closed model, there is the possibility to consider a number of independent variables. The remaining dependent variables become implicit functions. Unfortunately, the main mathematical tool, the theorem of implicit functions, gives only an existence result.
By using the derivative formula, it is possible to find the numerical solution for the implicit function. This means we will be able to find the values of the implicit function according to a finite scheme.
Keywords:
mathematical modeling, non-closed models
JEL Classification:
C63