Marsiliani, Laura and Renstroem, Thomas (2009) 'Integrated aggregation in dynamic economies.', Working Paper. Durham University, Durham.
The paper provides necessary and sufficient conditions for aggregation of heterogeneousindividuals in dynamic economies, when individuals differ in abilities as well as in capitalendowments, and when there are distortionary taxes. The aggregation theorems imply that thecompetitive equilibrium can be represented as if there was only one individual in theeconomy. This considerably facilitates analysis of the aggregate economy, such as stabilityanalysis, as well as of the distribution of wealth. Furthermore, the paper provides conditionsunder which a representative individual coincides with one of the individuals in the economy.
|Item Type:||Monograph (Working Paper)|
|Keywords:||Aggregation, Economic dynamics, Heterogeneity, JEL classifcation: D30 D91 E21.|
|Full text:||PDF - Published Version (194Kb)|
|Publisher Web site:||http://www.dur.ac.uk/business/faculty/working-papers/|
|Record Created:||07 Dec 2012 10:37|
|Last Modified:||07 Dec 2012 12:58|
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