التفاصيل البيبلوغرافية
| العنوان: |
Utility Function Transformations and Money Illusion: A Further Comment. |
| المؤلفون: |
Howitt, Peter1, Patinkin, Don2 |
| المصدر: |
American Economic Review. Sep80, Vol. 70 Issue 4, p826. 3p. 1 Diagram. |
| مصطلحات موضوعية: |
*UTILITY functions, *MONEY illusion, *PRODUCTION (Economic theory), *ECONOMIC demand, *ELASTICITY (Economics), *ESTIMATION theory, *CONSUMPTION (Economics) |
| مستخلص: |
The article discusses utility function transformations and money illusion. Researchers Richard Dusansky and Peter Kalman (D-K) papers specify utility functions which are actually mono- tonic transformations of standard ones (i.e., functions which are homogeneous of degree zero (HDO) and thus provide only a spurious generalization of the class of utility functions that generate demand functions which are free of money illusion. Researchers have demonstrated that a necessary and sufficient condition for demand functions to be free of money illusion is that they be derivable from a standard utility function. Thus, as it is in standard consumer theory, for two utility functions to yield the same demand function, they must be positive monotonic transformations of each other. The intuitive explanation of this fact is that the entry of prices into the utility function creates an additional interdependence between it and the budget restraint that precludes certain combinations from ever being chosen by the household as optimal ones. Hence two different utility functions and need not provide the same ordering of these "unchooseable" combinations in order to yield the same demand functions. |
| قاعدة البيانات: |
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