A REVEALED PREFERENCE TEST FOR WEAKLY SEPARABLE UTILITY MAXIMIZATION WITH INCOMPLETE ADJUSTMENT

Functional structure is an important issue in many areas of economics. We suggest a nonparametric revealed preference test for weakly separa ble utility maximization that permits category incomplete adjustment w ithin the period under study. This test is an extension of the necessa ry and sufficient condition for weakly separable utility maximization developed by Varian (1983). We implement this test and identify a quar terly economic monetary aggregate. This is the first implementation th at we know about of any revealed preference necessary and sufficient c ondition for weakly separable utility maximization. We also perform se nsitivity analyses of the test and find it to be reasonably robust.