IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

CES Transaction Functions in Macroeconomic Rationing Models

Listed author(s):
  • Eskil HEINESEN

    (Institute of Economics, University of Copenhagen)

In recent years a large number of macroeconomic rationing models with smooth CES transaction functions have been estimated. The widely used CES transaction functions with three arguments are often claimed to be derivable (as approximate relationships) from an assumption of lognormally distributed demands and supplies. One objective of this paper is to point out that the reasoning offered in the literature for this claim is not very clear or rigorous. Another, and more constructive, objective is to analyse and discuss in detail the derivation and properties of the CES transaction functions. Basic assumptions under- lying the CES transaction functions are illuminated on the basis of a rather general description of the aggregation problem in models with both goods and labour markets, and general properties of transaction functions based on "multiplicative distributional assumptions" are analysed. Several new results concerning the exact derivation of the CES transaction functions on the basis of the Weibull distribution are shown. The quality of the CES transaction functions as approximate relationships given lognormally distributed demands and supplies is discussed. Finally it is shown that the CES transaction functions have reasonable properties.

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:
Download Restriction: no

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 1994032.

in new window

Length: 31
Date of creation: 01 Sep 1994
Handle: RePEc:ctl:louvre:1994032
Contact details of provider: Postal:
Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium)

Fax: +32 10473945
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

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

When requesting a correction, please mention this item's handle: RePEc:ctl:louvre:1994032. 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: (Sebastien SCHILLINGS)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.