Local Aggregation in a Dynamic Setting
Although 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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- Joseph E. Stiglitz, 1967.
"Distribution of Income and Wealth Among Individuals,"
Cowles Foundation Discussion Papers
238, Cowles Foundation for Research in Economics, Yale University.
- Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-397, July.
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