Balanced-growth-consistent recursive utility
The 'recursive utility' concept proposed by Koopmans in 1960 has been applied to a range of dynamic modelling problems. However, the use of this concept in the construction of balanced-growth models has been surprisingly limited. One reason for this is that there are only a few recursive utilities that can be used for balanced-growth problems. A potential solution to this lack of appropriately consistent recursive utility functions is proposed. The solution centers around the construction of a family of utility functions that can be used in balanced-growth modelling.
Publication Name: Journal of Economic Dynamics & Control
Functional separability and the existence of consistent aggregates in U.S. manufacturing: reply
The challenge made by Ramaiah and Dalal (1996) on the weak separability tests of Yuhn (1991) is criticized. The separability condition does not imply that the equation a(Si/Sj)/apk should equal to zero in order to prove the separability relation. The results of their study are questionable because they rely on the validty of the said equation. Furthermore, a proper function must show that the logarithm of the likelihood with fewer limitations must be greater than the one with greater limitations.
Publication Name: International Economic Review
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