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Volkswirtschaft - Open Access LMU - Teil 01/03 Podcast
Local Aggregation in a Dynamic Setting

Local Aggregation in a Dynamic Setting

Volkswirtschaft - Open Access LMU - Teil 01/03 vor 36 Jahren

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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