Gorman polar form: Difference between revisions

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:<math>X(p,m^1,\dots,m^n) = X(p, \sum_{i=1}^n {m^i})</math>
 
Under what conditions is it possible to represent the aggregate demand asin athis function of the price and the aggregate incomeway?
 
Early results by Antonelli (1886) and Nataf (1953) had shown that, assuming all individuals face the same prices in a market, their income consumption curves and their [[Engel curve]]s (expenditure as a function of income) should be parallel straight lines. This means that we can calculate an income-consumption curve of an entire society just by summing the curves of the consumers. In other words, suppose the entire society is given a certain income. This income is somehow distributed between the members of society, then each member selects his consumption according to his income-consumption curve. If the curves are all parallel straight lines, the aggregate demand of society will be ''independent of the distribution of income among the agents''.