Aggregation problem

While in the Microeconomics examines individual behavior of firms and households and are described using micro-economic functions, functional relationships between the be subject of microeconomic variables on macroeconomic variables, aggregate sizes in macroeconomics. The aggregation problem is the question whether and how micro-economic and macro-economic functions are compatible.

Example

Assuming approximately at the microeconomic level that the household final monetary consumption demand of each consumer i is a linear function of his income, macroeconomic consumption demand C is all and the national income Y is defined as the sum of the sum of all individual income, so the question arises whether it F is a function such that

( i) for all i = 1, ..., n, and

Apply simultaneously. In general, this is not the case, since a given value of Y can be divided in many different ways among the n consumers, which would lead to correspondingly different values ​​of the aggregate consumption C. With only two consumers with individual consumption functions and the aggregate consumption C for a given aggregate income Y can be any value between 0.4 and 0.6 Y Y assume when nothing is known about the distribution of Y between the two consumers.