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Money illusion, Gorman and Lau

Scott Colby, Tim Graciano (), Jeffrey LaFrance () and Pope Rulon

MPRA Paper from University Library of Munich, Germany

Abstract: Any demand equation satisfying Lau’s (1982) Fundamental Theorem of Exact Aggregation and is 0 homogeneous in prices and income will have a Gorman (1981) functional form for each income term. This property does not depend on symmetry or adding up. The implications of this result are illustrated by an extensive example.

Keywords: Demand; exact aggregation; functional form; homogeneity (search for similar items in EconPapers)
JEL-codes: D11 D01 (search for similar items in EconPapers)
Date: 2011-08-05
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Working Paper: MONEY ILLUSION, GORMAN AND LAU (2011) Downloads
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