COMPARATIVE STATICS OF MONEY-GOODS SPECIFICATIONS OF THE UTILITY FUNCTION

The introduction of real-cash balances into the neoclassical model of the consumer wrecks havoc, in general, on the empirically observable refutable comparative statics properties of the model. We provide the most general solution of this problem to date by deriving a symmetric and negative semidefinite generalized Slutsky matrix that is empirically observable and which contains all other such comparative statics results as a special case. In addition, we clarify and correct two aspects of Samuelson and Sato’s (1984) treatment of this problem.


Issue Date:
2001
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/11953
Total Pages:
21
Series Statement:
Working Paper 01-006




 Record created 2017-04-01, last modified 2017-04-04

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)