Exact aggregation and generalized Slutsky conditions (Q792852)

The article shows the existence of a natural connection between a) certain restrictions for the matrix of aggregate price derivatives of consumer demand functions (the generalized Slutzky conditions: GSC), and b) the theory of exact aggregation (stating conditions under which a particular type of aggregate demand function exists). It is shown in particular that the first set of conditions is assured (for the case where the GSC are not known to hold true) iff individual demands are of a generalized exact aggregation form. This result provides further understanding of the relations between properties of aggregate demand and allowable differences between consumers as well as the 'integrability of aggregate demand'.