Abstract
On several occasions throughout the years I had the pleasure of discussions with Camilo Dagum. They always concerned the state of our common discipline, economics, of which the two of us were not always criticizing the same theoretical developments. But we shared a common interest for quantitative methods and for their role in the advancement of economic knowledge. This book gives me an excellent opportunity for looking again into the methodology of that role. In order to avoid long repetitions with what I already wrote elsewhere on the same broad issue, I shall more precisely consider here the interplay between the systematic use of microeconomic data and the continual respecification of models of aggregate phenomena.
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Reference
A Lewbel, “The rank of demand systems: theory and non parametric estimation”, Econometrica, May 1991.
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In any case, the use of the representative agent fiction raises different problems from those introduced by the confusion between households and firms. We blur the issues if we do not distinguish the two kinds of problems. This is one of the reasons why I do not fully endorse the position expressed by A. Kirman in “Whom or what does the representative individual represent ?”, Journal of Economic Perspectives, Spring 1992, p. 117–136.
The conclusions to be derived from the literature on this question are presented in A. Kirman, op.cit.
For a discussion of answers to this broad question see for instance E. Malinvaud, op.cit.
In many cases, but not always. For instance a serious examination of the aggregation of production functions suggests that the common elasticity of substitution of the most appropriate macroeconomic function has little chance to be well estimated by an average of the corresponding elasticities of the microeconomic functions. Indeed, the aggregate production function is meant to serve in the representation of constraints linking quantity and price changes (inputs, ouput, real wage and interest rates) as a consequence of technical constraints, the behaviour of firms and the market conditions in which they operate. Aggregation is more complex in this case than in the framework of section 2. See in particular E. Malinvaud, Macroeconomic Theory: A Textbook on Macroeconomic Knowledge and Analysis,Elsevier, Amsterdam, 1998; chapter 4, part 6.
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© 1999 Physica-Verlag Heidelberg
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Malinvaud, E. (1999). About the Contribution of Econometrics to the Advancement of Knowledge: The Macroeconomic Relevance of Microeconomic Data. In: Slottje, D.J. (eds) Advances in Econometrics, Income Distribution and Scientific Methodology. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-93641-8_1
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