02120cas a2200265 a 4500 AALejournalIMF005565 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451871715 1018-5941 BD-DhAAL BD-DhAAL Monroe, Hunter. Can Markets Compute Equilibria? / Hunter Monroe. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (22 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Recent turmoil in financial and commodities markets has renewed questions regarding how well markets discover equilibrium prices, particularly when those markets are highly complex. A relatively new critique questions whether markets can realistically find equilibrium prices if computers cannot. For instance, in a simple exchange economy with Leontief preferences, the time required to compute equilibrium prices using the fastest known techniques is an exponential function of the number of goods. Furthermore, no efficient technique for this problem exists if a famous mathematical conjecture is correct. The conjecture states loosely that there are some problems for which finding an answer (i.e., an equilibrium price vector) is hard even though it is easy to check an answer (i.e., that a given price vector is an equilibrium). This paper provides a brief overview of computational complexity accessible to economists, and points out that the existence of computational problems with no best solution algorithm is relevant to this conjecture. Mode of access: Internet Equilibrium Price imf WP imf IMF Working Papers; Working Paper ; No. 2009/024 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/024/001.2009.issue-024-en.xml IMF e-Library