On the performance of the representative agent during out-of equilibrium dynamics
2011, Economics Bulletin, 31(1), pp.874-882
Résumé
This essay contributes to the discussion about the representative agent’s ability to characterize the collection of agents. We perform two exercises in context of a fairly general multi-product multi-agent environment and show that in order the representative agent to be able to describe the off-equilibrium dynamics of the society one needs additional assumptions. It is established that this feature is not specific to the economies with interacting agents.