Typical properties of large random economies with linear activities

Details Typical properties of large random economies with linear activities Typical properties of large random economies with linear activities

2003-09-23

arxiv.org/abs/cond-mat/0309533v3

Physics

Condensed Matter

Statistical Mechanics

19 pages, 5 figures

Scientific paper

We study the competitive equilibrium of large random economies with linear activities using methods of statistical mechanics. We focus on economies with $C$ commodities, $N$ firms, each running a randomly drawn linear technology, and one consumer. We derive, in the limit $N,C\to\infty$ with $n=N/C$ fixed, a complete description of the statistical properties of typical equilibria. We find two regimes, which in the limit of efficient technologies are separated by a phase transition, and argue that endogenous technological change drives the economy close to the critical point.

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