Local Aggregation in a Dynamic Setting
AbstractAlthough it is not possible, in general, to give a macro description of a micro model over the entire state space of the micro model, it is possible to aggregate exactly over a subspace. The set of micro states where aggregation is possible forms the aggregation set. The paper considers the local (linear) case. The macro model is chosen such that it gives rise to an aggregation set which is approached by the micro movements as fast as possible. The inferred macro model describes trajectories of the aggregate quantities towards which the "true" trajectories of these quantities, as generated by the micro model, are tending.
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 2118.
Date of creation: 1990
Date of revision:
Publication status: Published in Journal of Economics 3 (1990): pp. 287-305
Aggregation; reduction of dimensions; local aggregation; linear aggregation; approximate aggregation; dynamical systems; inverse aggregation problem; inverse aggregation problem; hermeneutic aggregation problem; microfoundations of macroeconomics;
Other versions of this item:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
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- Joseph E. Stiglitz, 1967.
"Distribution of Income and Wealth Among Individuals,"
Cowles Foundation Discussion Papers
238, Cowles Foundation for Research in Economics, Yale University.
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- Schlicht, Ekkehart, 1985. "The Local Aggregation Problem," Darmstadt Discussion Papers in Economics 38047, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
- Adolf Wagner, 2004. "Statistische Adäquation bei Fortentwicklung der makrökonomischen Wirtschaftstheorie," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 224(5), pages 612-625, September.
- Krysiak, Frank C. & Krysiak, Daniela, 2002. "Aggregation of Dynamic Systems and the Existence of a Regeneration Function," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 517-539, November.
- Schlicht, Ekkehart, 1997. "The moving equilibrium theorem again," Economic Modelling, Elsevier, vol. 14(2), pages 271-278, April.
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