Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Cobb-Gouglas function as an approximation of other functions

Contents:

Author Info

Abstract

By defining the Variable Output Elasticities Cobb-Douglas function, this article shows that a large class of production functions can be approximated by a Cobb-Douglas function with nonconstant output elasticity. Compared to standard flexible functions such as the Translog function, this framework has several advantages. It requires only the use of the first order approximation while respecting the theoretical curvature conditions of the isoquants. This greatly facilitates the deduction of linear input demands function without the need of involving the duality theorem. Moreover, it allows for a generalization of the CES function to the case where the elasticity of substitution between each pair of inputs is not necessarily the same.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2011-21.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Francesco Saraceno)
Download Restriction: no

Bibliographic Info

Paper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2011-21.

as in new window
Length:
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:fce:doctra:1121

Contact details of provider:
Postal: 69, quai d'Orsay - 75007 PARIS
Phone: 01 44 18 54 00
Fax: 01 45 56 06 15
Email:
Web page: http://www.ofce.sciences-po.fr/
More information through EDIRC

Related research

Keywords: flexible production functions; Cobb-Douglas function; CES function.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Samuelson, Paul A, 1979. "Paul Douglas's Measurement of Production Functions and Marginal Productivities," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 923-39, October.
  2. W. Erwin Diewert & T.J. Wales, 1989. "Flexible Functional Forms and Global Curvature Conditions," NBER Technical Working Papers 0040, National Bureau of Economic Research, Inc.
  3. Perroni, Carlo & Rutherford, Thomas F., 1995. "Regular flexibility of nested CES functions," European Economic Review, Elsevier, vol. 39(2), pages 335-343, February.
  4. Jesus Felipe & F. Gerard Adams, 2005. ""A Theory of Production" The Estimation of the Cobb-Douglas Function: A Retrospective View," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 427-445, Summer.
  5. Matthieu Lemoine & Gian Luigi Mazzi & Paola Monperrus-Veroni & Frédéric Reynes, 2010. "A new production function estimate of the euro area output gap This paper is based on a report for Eurostat: 'Real time estimation of potential output, output gap, NAIRU and Phillips curve for Euro-zo," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 29(1-2), pages 29-53.
  6. S K Mishra, 2010. "A Brief History of Production Functions," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(4), pages 6-34, November.
  7. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-88, September.
  8. Grant, James H., 1993. "The translog approximate function : Substitution among inputs in manufacturing evaluated at sample means," Economics Letters, Elsevier, vol. 41(3), pages 235-240.
  9. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
  10. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  11. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-66, September.
  12. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
  13. Dale W. Jorgenson, 1998. "Growth, Volume 1: Econometric General Equilibrium Modeling," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100738, December.
  14. Frédéric Reynes & Yasser Yeddir-Tamsamani & Gaël Callonec, 2011. "Presentation of the Three-ME model: Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy," Documents de Travail de l'OFCE 2011-10, Observatoire Francais des Conjonctures Economiques (OFCE).
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fce:doctra:1121. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Francesco Saraceno).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.