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Theoretical Development of the Partial Equilibrium Model

  • Yuzuru Miyata
  • Hiroyuki Shibusawa
  • Indrawan Permana
  • Any Wahyuni
Chapter
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 23)

Abstract

The partial equilibrium is a type of economic equilibrium model commonly used to analyze cities and urban areas from an urban economics point of view. In a partial equilibrium model, clearance on the market of certain specific goods is obtained independently from prices and quantities demanded and supplied in other markets. In other words, the prices of all substitutes and complements, as well as consumers’ income levels, are constant. This constancy enables a dynamic process that allows prices to be adjusted until supply equals demand. This powerfully simple technique allows one to study equilibrium, efficiency, and comparative statics. The stringency of the simplifying assumptions inherent in this approach makes the model produce results that do not effectively reflect real-world economic phenomena, although seemingly precise.

References

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Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  • Yuzuru Miyata
    • 1
  • Hiroyuki Shibusawa
    • 1
  • Indrawan Permana
    • 2
  • Any Wahyuni
    • 3
  1. 1.Department of Architecture and Civil EngineeringToyohashi University of TechnologyToyohashiJapan
  2. 2.Department of Architecture, Faculty of EngineeringPalangka Raya UniversityKalimantan TengahIndonesia
  3. 3.Directorate General of Highways - Ministry of Public Works of IndonesiaMakassarIndonesia

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