Our contribution offers a methodological exhibition of general equilibrium models with price and quantity signals. By the application of optimal value functions the household as well as the firm behaviour is modelled. The concepts of virtual prices and virtual quantities allow us to express...

In a general equilibrium model of a small open economy with a nontraded goods sector involuntary low-skilled labour unemployment is introduced by an exogenously given wage rate, orientating ourselves by what has been called in the literature the 'European scenario'. By the concept of constrained...