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According to microeconomic theory, a system of demand equations should satisfy homogeneity (the absence of money illusion) and Slutsky symmetry (the substitution effects of price changes are symmetric). This chapter deals with the econometric testing of these implications. Relatedly, as microeconomic theory refers to the individual consumer, how can this be applied to aggregated data such as that contained in the national accounts? The convergence approach to aggregation provides an elegant solution to this problem, details of which are in this chapter. Finally, the stability or otherwise of tastes internationally is discussed.

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Demand Systems II: Further Results and Details

  • 章节

  • 发表日期：

    2025年

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  • Kenneth W. Clements,
  • Haiyan Liu,
  • Marc Jim M. Mariano,
  • Eliyathamby A. Selvanathan,
  • Saroja Selvanathan,
  • George Verikios

摘要

According to microeconomic theory, a system of demand equations should satisfy homogeneity (the absence of money illusion) and Slutsky symmetry (the substitution effects of price changes are symmetric). This chapter deals with the econometric testing of these implications. Relatedly, as microeconomic theory refers to the individual consumer, how can this be applied to aggregated data such as that contained in the national accounts? The convergence approach to aggregation provides an elegant solution to this problem, details of which are in this chapter. Finally, the stability or otherwise of tastes internationally is discussed.