Comparative statics for dynamic models: empirical implications of the Frisch decomposition.
In this paper, I establish a link between static and dynamic models using a new set of results related to the Frisch demand function and a generalization of the Frisch decomposition of demand (which is an alternative to the familiar Slutsky decomposition). It was previously believed that estimates...
| Publicado en: | International Economic Review Vol. 37; pp. 103 - 115 |
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| Formato: | Artículo |
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Wiley-Blackwell
February 1996
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| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | In this paper, I establish a link between static and dynamic models using a new set of results related to the Frisch demand function and a generalization of the Frisch decomposition of demand (which is an alternative to the familiar Slutsky decomposition). It was previously believed that estimates obtained from static models do not directly provide implications for life-cycle behavior. However, I develop a methodology for inferring intertemporal elasticities of substitution in a dynamic system from parameter estimates of an “appropriate” static system. This methodology applies to general multi-constraint optimization problems where some constraints may be nonlinear. Reprinted by permission of the publisher. |
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