The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Jan, 1964, Volume 32, Issue 1
https://doi.org/0012-9682(196401/04)32:1/2<189:PFCFAT>2.0.CO;2-3
p. 189-197
W. M. Gorman
Turning now to the Friedman theory of consumption, there is a basic assumption which is fundamental to this theory which must be challenged. This is that the utility function can be assumed to be homogeneous in the value of consumption at different dates. For this to be true for all possible sets of prices for the different commodities it would be necessary for the utility function to be completely homogeneous in the quantities of all the goods consumed. And, if this were true, then a change in the level of income would produce proportionate changes in the consumption of all commodities. This is so contrary to common sense and the results of empirical research that the assumption of complete homogeneity must be dismissed. It follows that Friedman's basic assumption of the homogeneity of the utility function considered as a function of the total value of consumption at different periods could only hold true for certain special sets of prices. And it seems a priori rather unlikely that one of these special sets of prices should happen to coincide with the actual and expected market prices.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
