Abstract
In many problems of economic theory we need to use aggregates. The general Walrasian system and its more modern dynamic extensions are relatively barren of results for macroeconomics and economic policy. Hence, in our desire to deal with such questions we use highly aggregated systems by sheer necessity, often without having much more than the same necessity as our justification. Perhaps the most important result to date for justifying aggregation under certain circumstances is the Lange-Hicks1 condition, about which we shall say more later.
[Econometrica 29, 111–138 (1961)].
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Notes
Lange, O., Price Flexibility and Employment, Cowles Commission Monograph 8 (Bloomington, Ind.: Principia Press, 1944), pp. 103 ff.
Balderston, J. B. and T. M Whitin, ‘Aggregation in the Input-Output Model’, in Economic Activity Analysis, ed. by O. Morgenstern (New York: Wiley, 1954).
Fisher, F. M., ‘On the Cost of Approximate Specification in Simultaneous Equation Estimation’, Econometrica 29 (April, 1961).
See, for instance, E. C. Titchmarsh, The Theory of Functions, (London: Oxford Univ. Press, 2nd ed., 1939).
See, for instance, J.H.M. Wedderburn, Lectures on Matrices, (New York: American Mathematical Society, 1934) pp. 25ff.
See, for instance, Courant, R. and D. Hilbert, Methods of Mathematical Physics, (New York: Interscience Publishers, 1953), pp. 42–43 and 343–350.
See, for instance, J. B. Balderston and T.M. Whitin, op. cit.; O. Morgenstern and Whitin, ‘Aggregation and Errors in Input-Output Models’, Logistics Research Project, George Washington University, cited in F. T. Moore, ‘A Survey of Current Inter-Industry Models’, in Input-Output Analysis, an Appraisal, Studies in Income and Wealth, Vol. 18, p. 228 (National Bureau of Economic Research). J.C. H. Fei, ‘A Fundamental Theorem for the Aggregation Problem of Input-Output Analysis’, Econometrica, 400–412 (1956); S. B. Noble, ‘Structure and Classification in Resource Flow Models’, The George Washington University Logistic Research Project, Serial T-100/59, May 19, 1959; and A. Ghosh, ‘Input-Output Analysis with Substantially Independent Groups of Industries’, Econometrica, 88–96 (1960).
H. Theil, Linear Aggregation of Economic Relations, (Amsterdam: North-Holland Publ. Co., 1954).
F. M. Fisher, op. cit.
R.M. Goodwin, ‘Dynamic Coupling with Especial Reference to Markets Having Production Lags’, Econometrica, 181–204 (1947).
Tamotsu Yokoyama, ‘A Theory of Composite Commodity’, Osaka Economic Papers, May, 1952.
P. A. Samuelson, Foundations of Economic Analysis (Cambridge, Mass.: Harvard Univ. Press, 1947), pp. 144–46.
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© 1977 D. Reidel Publishing Company, Dordrecht, Holland
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Simon, H.A. (1977). Aggregation of Variables in Dynamic Systems. In: Models of Discovery. Boston Studies in the Philosophy of Science, vol 54. Springer, Dordrecht. https://doi.org/10.1007/978-94-010-9521-1_12
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DOI: https://doi.org/10.1007/978-94-010-9521-1_12
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