The Concept of Flexibility and Generalized Nonlinear Functional Forms
| Authors | |
|---|---|
| Year of publication | 2004 |
| Type | Article in Proceedings |
| Conference | Mathematical Methods in Economics 2004 |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | Production function; flexible functional forms; WDI-type function; McCarthy-type function; elasticity of substitution |
| Description | The usual concept of flexibility is narrowly connected with the family of the flexible functional forms. There is, on the other hand, another way how to generalize the common (classical) functional forms, such as the Cobb-Douglas, the ACMS, the VES etc. The paper shows how the classical and some flexible functional forms (generalized Leontief) may be covered by the more general formulae, not too well-known as the WDI form and McCarthy-type form and bring the formulae for calculation of appropriate elasticities of substitutions. Further, the contribution suggests that both WDI form and McCarthy-type form can be integrated into more general expression incorporating also other flexible forms such as the TRANSLOG and the generalized Cobb-Douglas. These functional forms are considered in the producers context i.e. as a (direct) production functions, but they may be, as well as, used as the utility functions in the consumer background. |
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