1. 1 Economic Modelling Lecture 21 Micro Foundation to Macro

2. 2 General Equilibrium Set-up of Household and Firms Problem

3. 3 (2) (3) (4) (5) (6) First Order Conditions of Household Optimisation

4. 4 Derivation of Labour Supply, Consumption and Leisure Demand Functions (7) (8) (9) (10) (11)

5. 5 (12) (13) (14) (15)

6. 6 Real wage rate, profit and output in Equilibrium (16) (17) (18)

7. 7 Leisure, Labour Supply and consumption in Equilibrium (19) (20) (21)

8. 8 References Auerbach A.J. and L. J. Kotlikoff (1987), Dynamic Fiscal Policy. Cambridge University Press. Bhattarai K (2003) Macroeconomic Impacts of Consumption and Income Taxes: A General Equilibrium Analysis University of Hull. - A Review on Popular Models of Macroeconomic Fluctuations and Economic Growth, University of Hull. Dixon H (1987) A Simple Model of Imperfect Competition with Walrasian Features, Oxford Economic Papers, 39, 134-160. McKenzie Lionel W. (2002) Classical General Equilibrium Theory, Massachusetts Institute of Technology, Cambridge Massachusetts. Debreu Gerard (1959) Theory of Value: An Axiomatic Analysis of Economic Equilibrium, Yale University Press. Rankin Neil (1992) Imperfect competition, expectations and the multiple effects of monetary growth, the Economic Journal 102: 743-753. Rutherford T. F. (1995),Extension of GAMS for Complementary Problems Arising in applied Economic Analysis, Journal of Economic Dynamics and Control, 19, 1299- 1324. Shoven J.B. and J. Whalley (1992) Applying General Equilibrium, Cambridge University Press.