The Nonparametric Approach to the Demand for Monetary Assets
In Chapter 12 we showed the steps that are normally taken to reduce a very general consumer choice problem to a monetary asset choice problem. At this point, we are prepared to proceed and develop the microeconomic- and aggregation-theoretic literature on the demand for money and monetary assets. This is achieved by conducting the analysis within a microtheoretical framework, making use of a number of theoretical advances in a set of related theories — revealed preference, index numbers, duality, separability, and demand systems.
KeywordsUtility Function Nonparametric Approach User Cost Monetary Aggregate Indirect Utility Function
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- 1.For a good exposition of alternative forms of separability and their behavioral implications, see S. Pudney (1981) .Google Scholar
- 2.Blackorby, Primont, and Russell (1978) should be consulted as a definite source concerning separability, duality, and functional structure.Google Scholar
- 3.For applications of the nonparametric approach to monetary demand analysis, see James Swofford and Gerald Whitney (1986, 1987, 1988, 1994), Fisher (1989, Chapter 1), Fisher and Adrian Fleissig (1997), and Serletis and Ricardo Rangel-Ruiz (2001).Google Scholar