An Information Theory Approach to the Aggregation of Log-Linear Models

Pedro Albuquerque

No 4, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: In this paper, an unrestricted aggregation method for heterogeneous log-linear functions is presented. It employs inequality measures derived from information theory in the construction of an exact representation of the aggregate behavior of the economy. A condition for the identification of average micro parameters is proposed. It is shown that the method leads to previous results in the field when adequate restrictions are imposed. Two macroeconomic applications are discussed: the aggregation of the Lucas supply function and the time-inconsistent behavior of an egalitarian social planner facing agents with heterogeneous discount rates.

Date: 2000-07
References: Add references at CitEc
Citations: View citations in EconPapers (39)

Downloads: (external link)
https://www.bcb.gov.br/content/publicacoes/WorkingPaperSeries/wps04.pdf (application/pdf)

Related works:
Journal Article: A practical log-linear aggregation method with examples: heterogeneous income growth in the USA (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcb:wpaper:4

Access Statistics for this paper

More papers in Working Papers Series from Central Bank of Brazil, Research Department
Bibliographic data for series maintained by Rodrigo Barbone Gonzalez ().