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Retrospectives: The Origins of the Representative Agent

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  • James E. Hartley

Abstract

This paper examines Alfred Marshall's invention of the representative firm. Marshall first used the representative firm in order to describe an industry supply curve for an industry with heterogeneous firms. Despite Marshall's limited use of the notion, the representative agent was extensively criticized as an ephemeral, useless construct that was unable to account for economic growth and that ignored important heterogeneities. The criticisms succeeded in banishing the representative agent from economics. These initial criticisms are also shown to apply to modern uses of the representative agent as well.

Suggested Citation

  • James E. Hartley, 1996. "Retrospectives: The Origins of the Representative Agent," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 169-177, Spring.
  • Handle: RePEc:aea:jecper:v:10:y:1996:i:2:p:169-77
    Note: DOI: 10.1257/jep.10.2.169
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.2.169
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    References listed on IDEAS

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    1. Mehra, Rajnish & Prescott, Edward C., 1985. "The equity premium: A puzzle," Journal of Monetary Economics, Elsevier, vol. 15(2), pages 145-161, March.
    2. Thomas Mayer, 1998. "Indexed Bonds And Heterogeneous Agents," Contemporary Economic Policy, Western Economic Association International, vol. 16(1), pages 77-84, January.
    3. Marshall, Alfred, 1920. "Industry and Trade," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number marshall1920.
    4. Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
    5. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    6. Thomas Mayer, 1993. "Indexed Bonds and Heterogeneous Agents," CESifo Working Paper Series 36, CESifo Group Munich.
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    Citations

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    Cited by:

    1. Aoki, Masanao & Hawkins, Raymond, 2009. "Macroeconomic Relaxation: Adjustment Processes of Hierarchical Economic Structures," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-21.
    2. Philippe Delquié, 2003. "Optimal Conflict in Preference Assessment," Management Science, INFORMS, vol. 49(1), pages 102-115, January.
    3. Senbeta, Sisay, 2011. "How applicable are the new keynesian DSGE models to a typical low-income economy?," MPRA Paper 30931, University Library of Munich, Germany.
    4. Philipp Koellinger & Matthijs Loos & Patrick Groenen & A. Thurik & Fernando Rivadeneira & Frank Rooij & André Uitterlinden & Albert Hofman, 2010. "Genome-wide association studies in economics and entrepreneurship research: promises and limitations," Small Business Economics, Springer, vol. 35(1), pages 1-18, July.
    5. Aoki, Masanao & Hawkins, Raymond J., 2010. "Non-self-averaging and the statistical mechanics of endogenous macroeconomic fluctuations," Economic Modelling, Elsevier, vol. 27(6), pages 1543-1546, November.
    6. Herzberg, Frederik, 2010. "A representative individual from Arrovian aggregation of parametric individual utilities," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1115-1124, November.
    7. Carlos Alberto Ibarra, 1998. "Exchange Rate Policy Credibility in Mexico, 1991-1994," Economía Mexicana NUEVA ÉPOCA, , vol. 0(2), pages 229-266, July-Dece.
    8. Becker, Robert & Zilcha, Itzhak, 1997. "Stationary Ramsey Equilibria under Uncertainty," Journal of Economic Theory, Elsevier, vol. 75(1), pages 122-140, July.
    9. Alberto Jaramillo & Hermilson Velásquez & Javier Santiago Ortiz & Natalia Serna, 2003. "Aspectos teóricos y empíricos de la relación empresas bancos," DOCUMENTOS DE TRABAJO CIEF 003922, UNIVERSIDAD EAFIT.
    10. Oscar Andrés Espinosa Acuña & Paola Andrea Vaca González, 2012. "LA EDUCACIÓN COMO MOTOR DE DESARROLLO INTEGRAL: La importancia del capital humano en el crecimiento económico y social de largo plazo," ECONOGRAFOS - ESCUELA DE ECONOMÍA 009936, UN - RCE - CID.
    11. van Oosterhout, J. & Heugens, P.P.M.A.R., 2006. "Much Ado About Nothing: A conceptual critique of CSR," ERIM Report Series Research in Management ERS-2006-040-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

    More about this item

    JEL classification:

    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics

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