Economic Indicators 

When aggregates mislead

Chris Dillow

Chris Dillow
When aggregates mislead

One of the sillier ideas in economics is that of a “representative agent” household – the idea that consumer spending can be described as if it were the result of the decisions of a single person. This notion isn’t confined to academia – businessmen also talk of “the consumer” – but it stops us understanding what’s going on now, because in fact it is differences among households that are crucial.

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