A note on solving general equilibrium problems with variational inequality techniques

This note compares two algorithms for solving general equilibrium models: Newton’s method for the nonlinear complementarity formulation of this problem, and the recently proposed accelerated linear Jacobi method for the problem’s variational inequality formation. After summarizing the problem formulations, a series of numerical results are presented which show that the easily implemented linear Jacobi method can often solve problems for which Newton’s method fails.