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Local Aggregation in a Dynamic Setting

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  • Schlicht, Ekkehart

Abstract

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.

Suggested Citation

  • Schlicht, Ekkehart, 1990. "Local Aggregation in a Dynamic Setting," Munich Reprints in Economics 2118, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:2118
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    References listed on IDEAS

    as
    1. Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-397, July.
    2. Schlicht, Ekkehart, 1985. "The Local Aggregation Problem," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 38047, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
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    Cited by:

    1. Schlicht, Ekkehart, 1997. "The moving equilibrium theorem again," Economic Modelling, Elsevier, vol. 14(2), pages 271-278, April.
    2. Wagner Adolf, 2004. "Statistische Adäquation bei Fortentwicklung der makrökonomischen Wirtschaftstheorie / Statistical Adequacy and the Evolution of Macroeconomic Theory," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 224(5), pages 612-625, October.
    3. 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.
    4. Schlicht, Ekkehart, . "Grundlagen der ökonomischen Analyse," Monographs in Economics, University of Munich, Department of Economics, number 891, November.

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    JEL classification:

    • 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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