The invariance principle and income-wealth conservation laws. Application of Lie groups and related transformations
type: Item
instance of: scholarly article
title: The invariance principle and income-wealth conservation laws. Application of Lie groups and related transformations
zbMATH Open document ID: 0583.90013
DOI: 10.1016/0304-4076(85)90147-2
author: Ryuzo Sato
published in: Journal of Econometrics
publication date: 1985-01-01T00:00:00Z
review text: The purpose of this paper is to uncover ''hidden'' conservation laws in the models with heterogeneous capital goods. The first conservation law uncovered is a pseudo-net-productivity relation which implies that the rate of change in national income is equal to the discount rate multiplied by the utility-value-of-investment. Secondly, the ''modified income'' conservation law is confirmed when the economy possesses taste change and/or technical change. From an empirical perspective, knowledge of conservation laws can assist in the econometric testing of optimal growth models. In addition to the capital-labor ratio and saving ratio the empirical validity of the models can be tested by the appropriate income-wealth ratios.
Mathematics Subject Classification ID: 91B62
Mathematics Subject Classification ID: 62P20
zbMATH DE Number: 3934718
zbMATH Keywords: Lie groups
zbMATH Keywords: ''hidden'' conservation laws
zbMATH Keywords: heterogeneous capital goods
zbMATH Keywords: technical change
zbMATH Keywords: econometric testing of optimal growth models
MaRDI profile type: Publication
full work available at URL: 0304-4076(85)90147-2
OpenAlex ID: W1498591335
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description: scientific article; zbMATH DE number 3934718