Professor Kiminori Matsuyama Seminar "Generalized Engel's Law: In Search for A New Theoretical Framework"

(Professor Matsuyama, Mr. Kobayashi from the left)

Seminar outline

Title: "Generalized Engel's Law: In Search for A New Theoretical Framework"
Speaker: Kiminori Matsuyama, Professor, Department of Economics, Northwestern University, USA
Moderator: Keiichiro Kobayashi, Research Director, CIGS

Program
Program（PDF：88KB）

Presentation
Presentation1 by Prof. Matsuyama（PDF：3802KB）
Presentation2 by Prof. Matsuyama（PDF：355KB）

Abstract of the speech

The original Engel's law states that, as household income rises, the share of income spent on food falls. More generally, the expenditure shares of many categories of consumption goods change systematically with per capita income, both in time series and in cross-section of countries, even after controlling for price differences. In short, goods differ widely in their income elasticities. This has profound implications on the patterns of structural change over the course of economic development, as well as the patterns of trade between developed and developing countries. Yet, such generalized Engel's law is missing in most formal models of structural change and international trade, as they typically assume that preferences are homothetic, which implies that all goods share the identical income elasticity that is equal to one. Although there have been some attempts to incorporate nonhomothetic preferences in formal models, they are too restrictive to capture rich implications of the generalized Engel's law. In this talk, I will explain why they are too restrictive and propose a new form of nonhomothetic preferences and demonstrate its power with some applications to structural change and international trade.

Speaker's profile

Kiminori Matsuyama, Professor, Department of Economics, Northwestern University
Education
1987 Harvard University, Ph D in Economics
1980 University of Tokyo, BA in International Relations
Career
1995-present Professor, Northwestern University
1991-1995 Associate Professor, Northwestern University
1987-1991 Assistant Professor, Northwestern University
Spring 2008 Visiting Professor, MIT
Spring 1993, Fall 2003 Visiting Professor, University of Chicago
1991-1992 National Fellow, Hoover Institution