Economic Growth and Change in a Material World
Appendix C: Explicit representations of value and wealth functions and supplyÂ…demand curves
Appendix C: Explicit representations of value and wealth functions and supply–demand curves C.1 DERIVATION OF WEALTH FUNCTIONS In this Appendix we consider some possible explicit wealth and value functions for three cases. The ﬁrst case might be a pure trader of general goods, such as a country store, for which market decisions concerning the ith good in stock are independent of the quantities of the other goods it has in stock. In other words, for this particular trader the subjective value of the ith good does not depend on the quantities of the other goods held in stock. The second case might also be a trader, except that it is the marginal contributions of stock changes to wealth that are assumed to be independent. We will see that the corresponding functional forms are different. The third case is much more general. It applies to an agent such as a producer, whose stocks of goods are inter-dependent, either in value or quantity terms. This situation might arise because of the requirements of a production technology with either ﬁxed (Leontiev-type) or variable input coefﬁcients that are linked. Or it might apply to consumers, for whom the combination of stocks (e.g. books and shelf space, or dresses and shoes) is important. For this individual a change in one kind of stock changes the desired levels of other stocks, and hence his/her personal valuation of the combination. There is a convenient restriction on the Z-function that can be applied equally to all...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.