Money illusion, Gorman and Lau
Tim Graciano (),
Jeffrey LaFrance () and
MPRA Paper from University Library of Munich, Germany
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)
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Working Paper: MONEY ILLUSION, GORMAN AND LAU (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:32709
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