DEPARTMENT OF ECONOMICS

USAID relies heavily on a small number of well-connected contractors to deliver most aid, while other groups are often deterred from even applying by the process’s complexity. Use of rigorous evaluation methods like randomized controlled trials — where development programs are tested on a random subset of the target population to see if they work — are the exception, not the norm. One of the agency’s current leaders tasked with changing this status quo is its chief economist, Dean Karlan. His appointment was perceived as a major victory for people in and around USAID who want its programs to rely more on rigorous evidence.

The constant-elasticity-of-substitution (CES) aggregator and its demand system are ubiquitous in business cycles theory, macroeconomic growth and development, international trade and other general equilibrium fields; this is because the CES aggregator has many knife-edge properties that help to keep the analysis tractable in the presence of many goods and factors. However, this also makes it hard to tell which properties of CES are responsible for certain results. Furthermore, it is necessary to relax some of those properties for certain applications. In this article, I review several classes of non-CES aggregators, each of which removes some properties of CES and keeps the rest to introduce some flexibility while retaining the tractability of CES as much as possible. These classes are named after the properties of CES they keep. I explain how these classes are related to each other and

J. Landis “Lanny” Martin ’68, ’73 J.D. (’02, ’07, ’08 P), Northwestern alumnus, life trustee, former chair of the Board of Trustees and one of the University’s most generous benefactors, died today, Sept. 1. He was 77 years old.