Aggregation By Industry In High‐Dimensional Models

Abstract

Models of trading economies have become very large in dimensions and complex in structure. Conditions which are sufficient for aggregation in production and/or consumption are derived. They require the existence of linearly homogeneous indices of production and/or consumption in the industries or sufficient similarity among agents. These methods are applied to the Armington model and to a group of models in which the commodities in an industry are denned on a continuum. the results are applied to the method of constructing general‐equilibrium models with many commodities, tests of comparative advantage, and the measurement of effective protection in multicommodity industries. Copyright © 199..