A framework for aggregation theories

The past literature on aggregation theory is surveyed in terms of three nested formal models. The most general one distinguishes exogenous and endogenous variables, both for a micro- and a corresponding macro-model; it shows why the main problem lies in aggregation of exogenous variables; it suffices in particular for Leontief's results on commodity aggregates. The aggregation of economic relations further assumes that the micro-model is individualized; the case of aggregate production functions shows how varied are the micro-models that may be selected for the discussion. The statistical approach, moreover, introduces the distribution of individual characteristics and individual exogenous variables; it leads to a new view of exact aggregation; more importantly it draws attention to structural stability and to the study of factors explaining shifts in the statistical distribution of micro-variables and -parameters. The success of this approach explains why aggregation theory increasingly requires empirical research.