Stabilizing Representative Agent in Macroeconomics - The Samuelson-Koopmans Nexus?

Hugo C. W. Chu (hugochu@usp.br)

No 2016_17, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: Aggregation has been a pesky topic in economics at least since Stanley Jevons’s The Theory of Political Economy, when he resorted to a “fictitious mean” to grasp the complexity of an economy composed of heterogeneous agents. In the twentieth-century context, trade economists have helped deepen the search for a measure of society's overall welfare by which they brought out the concept of community indifference curve whose proofs were first provided in Gorman (1953) and in Samuelson (1956) under highly restrictive assumptions. Since there is a close relationship between community indifference curve and representative consumer, as proved by Samuelson (1956) and acknowledged by various authors such as Chipman (1965), Muellbauer (1976), and Dow and Werlang (1988), the question addressed in this article is: what role did Samuelson (1956) play in the rise of the representative-agent macroeconomics as materialized in the seminal papers by Cass (1965) and by Koopmans (1965) and continued into the traditions of Lucas (1969a, 1975, 1977), Kydland and Prescott (1982) and Prescott (1986)? I claim in this article that although Samuelson and Koopmans belonged to different scientific communities their research interests overlapped. Based also on archival works, this paper narrates how Samuelson’s representative consumer (agent) made it to Koopmans’s and, therefore, ultimately paved the way to today’s macroeconomics.

Keywords: Paul Samuelson; Tjalling Koopmans; Representative consumer; Representative Agent; General Equilibrium Theory. (search for similar items in EconPapers)
JEL-codes: B2 B22 (search for similar items in EconPapers)
Date: 2016-10-11
New Economics Papers: this item is included in nep-his and nep-hpe
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