THE ECONOMIC RECORD VERSUS AER: TWENTY SIX YEARS AHEAD ON THE MONEY-GOODS MODEL
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We prove that the symmetric and negative semidefinite modified Slutsky matrix derived by Samuelson and Sato (1984) for the money-goods model of the consumer, is identical to that derived by Pearce (1958) a quarter century before and restated sixteen years later by Berglas and Razin (1974). We also prove that these conditions are only sufficient for the problem at hand and are encompassed by a more general, modified Slutsky matrix that is necessary and sufficient as derived by Paris and Caputo (2001). These results have crucial relevance for test-ing the implications of consumer behavior.