%A Steven P. Dirkse %A Michael C. Ferris %T A Pathsearch Damped Newton Method for Computing General Equilibria %D April 1994 %R 94-03 %I COMPUTER SCIENCES DEPARTMENT, UNIVERSITY OF WISCONSIN %C MADISON, WI %X Computable general equilibrium models and other types of variational inequalities play a key role in computational economics. This paper describes the design and implementation of a pathsearch-damped Newton method for solving such problems. Our algorithm improves on the typical Newton method (which generates and solves a sequence of LCP's) in both speed and robustness. The underlying complementarity problem is reformulated as a normal map so that standard algorithmic enchancements of Newton's method for solving nonlinear equations can be easily applied. The solver is implemented as a GAMS subsystem, using an interface library developed for this purpose. Computational results obtained from a number of test problems arising in economics are given.