Money flexibility, price elasticity, and elasticity of marginal utility of consumption

Sergey Malakhov

MPRA Paper from University Library of Munich, Germany

Abstract: The development of G.Stigler’s original model of search describes the mathematical relationship between the elasticity of the marginal utility of consumption, the price elasticity, and the elasticity of the marginal utility of money income with respect to increase in the price of living and/or to inflation. This relationship can be used not only in economics of well-being but also in microeconomics where the increase in the price of living, i.e., in purchase price, can make consumption “bad” under the Veblen effect.

Keywords: money flexibility; price elasticity; elasticity of marginal utility of consumption; Veblen effect (search for similar items in EconPapers)
JEL-codes: D11 D63 (search for similar items in EconPapers)
Date: 2014-05-13
New Economics Papers: this item is included in nep-upt
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