Title: PRINCIPLES OF MODELING OF THE GENERAL ECONOMIC EQUILIBRIUM
Abstract: This paper focuses on formulation of the principles of macroeconomic modeling and their implementation in the theory of general dynamic equilibrium. The subject of the theoretical study is a closed private economy, in which two macroeconomic actors – households and investment firms – interact. Known general scientific principles – the analysis of dimensions, homogeneity and correspondence – are supplemented by specific principles that allow us to obtain an analytical form of behavioral functions. The general properties of these functions are analyzed from the point of view of utility theory. The relationship between the equations of profit and profitability dynamics and the forms of investment function is revealed. A comparative analysis of their properties is carried out. The functions of rates of payment for resources, which take into account their limitations, are proposed. It is shown that endogenous cyclic fluctuations arise in the classical AD – AS model, supplemented by equations of the dynamics of fixed capital and profitability. A mathematical analysis of the proposed model is carried out and its graphical interpretation is given using long-run curves of aggregate demand and aggregate supply. Indicators of the state of long-run equilibrium and the condition of its stability are determined.The possible directions of the proposed model are considered. In particular, it is shown that this model can include a financial market in which households and investment firms directly lend money to each other. This market can be represented using two symmetric demand-supply functions that link the interest rate, present and expected future cash reserves.