It is shown that a market with a continuum of traders possesses a competitive equilibrium even when the preferences are not complete. This generalizes further a result of Aumann, ('Econometrica'; 32: 39-50 (1964); 34: 1-17(1966)) who showed that the convexity assumption may be dispensed within the presence of a continuum of traders. The proof is inspired by the Arrow-Debreu ('Econometrica; 22: 265-290(1954)) proof for the finite case. (Author)
So far we have several conditions for consistency in the simple majority decision rule. These conditions assume that some preference orderings are not in the list of the possible individual orderings and each individual is free to choose any ordering in this list. When the list of the possible individual orderings is too wide, inconsistency may arise. But when the list is selected from a group of narrower ones, inconsistency never arises, no matter how each individual selects his own preference ordering in the list. The purpose of this paper is to give the complete catalogue of such lists. Our catalogue, of course, includes the conditions so far obtained. But it also includes some new conditions.
In this paper we estimate a complete system of demand equations making full use of the restrictions implied by economic theory. Our theoretical model is based on the Klein-Rubin linear expenditure system which was first estimated by Stone. We place primary emphasis on maximum likelihood estimates obtained using annual time series observations of prices and per capita consumption for the U.S. economy in the period 1948-1965. The plan of the paper is as follows: Section 1 begins with a discussion of the problems involved in making systematic use of economic theory to estimate demand functions; this is followed by a brief description of the linear expenditure system and discussion of the specification of its dynamic and stochastic structure. In Section 2 we describe three methods of estimating the linear expenditure system, including the maximum likelihood procedure which we believe is most appropriate. We report our results in Section 3 and our conclusions in Section 4. 1 A. INTRODUCTION The pure theory of consumer behavior is concerned with individual demand functions. An individual's preferences are assumed to be representable by a well behaved utility function, U(x1, .. . , x), where xi denotes the rate of consumption of the ith good. He is supposed to maximize U subject to the budget constraint n (1) E PkXk =I k = 1
This paper discusses recent work on the existence of aggregate production functions in models in which capital goods are specific to firms and cannot be used interchangeably. It is found that this raises problems not only for capital aggregation but also for the existence of labor and output aggregates. Recent work on the question of using aggregate production functions as approximations is also discussed.
This paper estimates a model specifying the determinants of trade credit in the United States total manufacturing sector for the postwar period. Trade credit is considered as a selling expense, like advertising outlays. Its determinants are derived from a profit maximization model in which the price, volume of output, and the selling costs are all variables to be jointly determined. The opportunity or cost of accounts receivable and accounts payable are specified and the response of these accounts as well as net trade credit to changes in various monetary decision variables is examined. TRADE CREDIT HAS been a major and growing source of finance in all sectors of the United States economy since World War II. Its volume and widespread use have not been matched by any other kind of business financing. Yet trade credit, like other components of working capital, has received little attention in the literature. One reason for this neglect is that trade credit is buried in the distribution activity of the firm, and sorting out the complex institutional factors that influence its behavior is extremely difficult. The few available studies on the subject have been concerned primarily with assessing the response of trade credit to changes in monetary policy. Rarely has attention been given to developing an optimal model of trade credit based on the theory of the firm, to specifying the opportunity cost of extending or receiving trade credit, or to incorporating the influence of changes in the monetary policy instruments on the optimal level of trade credit. In this paper we attempt to analyze these three problems. The brief discussion in Section 2 introduces the issues. The theoretical framework for the study is sketched in Section 3. In Section 3a, the concept of opportunity or user costs of accounts receivable and payable is developed. The relationship and response of these forms of trade credit to changes in monetary policy are discussed in Section 3b. The adjustment process is formulated in Section 3c. The empirical results of the model for accounts receivable, accounts payable, and net trade credit, i.e., the difference between accounts receivable and payable, are presented and analyzed in Section 4. The paper is concluded with a summary and an appendix describing the data sources and definitions of the variables used in the study.