ABSTRACT

The restrictions on individual technologies that are necessary and sufficient for the existence of Klein aggregates are too demanding to be useful in empirical analysis. Even if we allow the aggregates to depend on the entire distribution of component variables, as in (ll2), the individual technologies are linear in the finn-specific aggregates, and if we more realistically require that the economy aggregates depend only on the sum of component variables, as in (117), the individual technologies are linear in each output and input variable (implying, e.g., linear isoquants and linear production possibility surfaces).