Recursive Competitive Equilibrium - RCE

AAA

DEFINITION of 'Recursive Competitive Equilibrium - RCE'

An equilibrium concept associated with dynamic programs. Recursive competitive equilibrium (RCE) is characterized by time-invariant equilibrium decision rules that specify actions as a function of a limited number of state variables, which summarize the effects of past decisions and current information. Economic agents with knowledge of these state variables assess the current state of the economy. As their actions determine in part the values of the state variables in the next sequential time period, this structure is termed 'recursive'.

INVESTOPEDIA EXPLAINS 'Recursive Competitive Equilibrium - RCE'

The RCE concept is used in exploring various economic issues, including monetary and fiscal policy and business-cycle fluctuations. RCE decision rules include a number of functions, such as pricing and value.

RELATED TERMS
  1. Pareto Analysis

    A technique used for decision making based on the Pareto Principle, ...
  2. Equilibrium

    The state in which market supply and demand balance each other ...
  3. Classical Economics

    Classical economics refers to work done by a group of economists ...
  4. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
  5. Neoclassical Economics

    An approach to economics that relates supply and demand to an ...
  6. Policyholder Surplus

    The assets of a mutual insurance company minus its liabilities. ...
Related Articles
  1. The Austrian School Of Economics
    Economics

    The Austrian School Of Economics

  2. Nobel Winners Are Economic Prizes
    Options & Futures

    Nobel Winners Are Economic Prizes

  3. The History Of Economic Thought
    Economics

    The History Of Economic Thought

  4. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center