CoPS/IMPACT Working Paper Number OP-43

Title: Sparse matrix methods for computable general equilibrium models of the Johansen class

Authors: K.R. Pearson and Russell J. Rimmer

Abstract

Considers the solution of large systems of linear equations, such as those arising from a large linearized economic model. Recommends (a) that matrix inversion be avoided, in favour of LU methods; and (b) that sparsity in the system be exploited using special computer subroutines. Some examples of time savings are tabulated.

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JEL Classification: C63, C68.

Keywords: Numerical methods, sparsity, linear systems, imperfect competition, applied general equilibrium models.

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