Over-simplification and tractability in quasi-linear neg models
Résumé
An inconsistency is found in the demand side of the NEG models developed in Pflüger (2004) that follows from the absence of a non-negativity constraint on the consumption of agricultural goods. This seriously weakens the results of the original paper and those of ensuing contributions in Pflüger and Südekum (2008a,b). A solution to this problem is developed which imposes severe restrictions on the relative size of two of the core model parameters, the implications of which are examined.
Domaines
Economies et finances
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