Retrospectives: The Origins of the Representative Agent
- (pp. 169-177)
AbstractThis paper examines Alfred Marshall's invention of the representative firm. Marshall first used the representative firm in order to describe an industry supply curve for an industry with heterogeneous firms. Despite Marshall's limited use of the notion, the representative agent was extensively criticized as an ephemeral, useless construct that was unable to account for economic growth and that ignored important heterogeneities. The criticisms succeeded in banishing the representative agent from economics. These initial criticisms are also shown to apply to modern uses of the representative agent as well.
Citation1996. "Retrospectives: The Origins of the Representative Agent." Journal of Economic Perspectives, 10(2): 169-177. DOI: 10.1257/jep.10.2.169
- B13 History of Thought: Neoclassical through 1925 (includes Austrian, Marshallian, Walrasian
- D21 Firm Behavior
- B31 History of Thought: Individuals
- B21 History of Thought: Microeconomics