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Isolation and Aggregation in Economics

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  • Schlicht, Ekkehart

Abstract

In explaining economic phenomena, economic analysis concentrates on selected influences and fixes the host of other factors under a ceteris paribus clause. This view, which goes back to Alfred Marshall (1842-1924), is developed in the first part of the book. Aggregation is viewed as a particular application of ceteris paribus analysis - isolation from "structural effects". This leads to an approach, called "closed aggregation", which was introduced by Kenneth May and is also implicit in Keynes' writings but has been neglected more recently. It is argued that macroeconomic models are more stable and more general than the corresponding micro models and that there is no simple analogy between them.

Suggested Citation

  • Schlicht, Ekkehart, . "Isolation and Aggregation in Economics," Monographs in Economics, University of Munich, Department of Economics, number 38821, November.
    • Handle: RePEc:lmu:muenbk:38821
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    References listed on IDEAS

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    1. Schlicht, Ekkehart, . "Grundlagen der ökonomischen Analyse," Monographs in Economics, University of Munich, Department of Economics, number 891, November.
    2. Schlicht, Ekkehart & Ludsteck, Johannes, 2006. "Variance Estimation in a Random Coefficients Model," Discussion Papers in Economics 904, University of Munich, Department of Economics.
    3. Vasilev, Aleksandar & Maksumov, Rashid, 2010. "Critical analysis of Chapter 23 of Keynes’s Notes on Mercantilism in The General Theory of Employment, Interest and Money (1936)," EconStor Research Reports 155318, ZBW - Leibniz Information Centre for Economics.
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