Hinweis zum Urheberrecht | Allgemeine Informationen | FAQ
Beim Zitieren dieses Dokumentes beziehen Sie sich bitte immer auf folgende URN: urn:nbn:de:hbz:5-14968

Wirtschaftswissenschaftlicher Fachbereich - Jahrgang 2008



Heterogeneity in Economics and Aggregation


Michal Paluch




Heterogeneity is all around us. People differ substantially with respect to their tastes, expectations, and available resources, and firms are heterogeneous in technologies and the quantity or nature of input factors. Since macroeconomics deals, amongst others, with relationships between aggregates over heterogeneous populations of economic agents, sound macroeconomic models should not neglect nor implausibly restrict the variety of agents. In models without behavioral heterogeneity there is no room for distributional considerations, trade, asymmetric information or coordination of individuals. Finally, the presence of heterogeneity is crucial to guarantee the uniqueness and stability of equilibrium.
Yet, many macroeconomic models treat heterogeneity in a very simplistic and often trivial way. They are based on the notion of the representative agent (RA) who solves an explicitly stated optimization problem and whose choices coincide with the aggregate choices of the heterogeneous individuals or firms. The traditional aggregate consumption function and aggregate production function are best examples of this modeling approach. However, the logical consistency of these models, that is, the compatibility with microeconomic theories of behavior, requires very restrictive and implausible assumptions on the heterogeneity of the population and on the model of individual behavior. The straightforward conclusion is that traditional aggregate consumption and production functions, in general, do not exist. This negative theoretical result is far from being new, as its earliest version goes back to Antonelli (1886). more...

Komplette Version

Hier können Sie den Adobe Acrobat Reader downloaden pdf-Dokument (1,5 MB)

© Universitäts- und Landesbibliothek Bonn | Veröffentlicht: 2008