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by selectionbias
2375 days ago
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I don't see how micro-founded macro models equate utility with willingness to pay? Work-horse New Keynesian models begin with a representative agent so willingness to pay of different consumers doesn't even make sense in this context. Moreover, these models are (to my knowledge) seldom used for welfare analysis but rather to examine things like the effects of montetary policy on employment and growth. Models with heterogeneous agents certainly don't assume willingness to pay is the same as utility. I'm an econometrician not a macroeconomist though so perhaps I'm missing something. |
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