Bounding an Economic Monetary Aggregate Under Nonhomothetic Preferences

We construct nonparametric bounds on true-quantity indexes for the realistic case of nonhomothetic preferences. These bounds do not require assumptions about the form of the underlying aggregator function. We construct these bounds using monetary assets that meet necessary conditions for the existence of an aggregate. We find that a Törnqvist index of these monetary assets falls within the nonparametric bounds on true-quantity indexes almost all of the time, whereas a simple sum of these monetary assets falls outside these bounds more than one-third of the time

Bounding overwatch · Econometrics · Economics · Mathematical economics · Monetary economics · Monetary policy · News aggregator · Nonparametric statistics · Computer Science · Decision-Making and Behavioral Economics · Economic theories and models · Mathematics · Monetary Policy and Economic Impact

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