The Cobb-Gouglas function as an approximation of other functions

Frédéric Reynès ()

No 2011-21, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

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.

Keywords: flexible production functions; Cobb-Douglas function; CES function. (search for similar items in EconPapers)
JEL-codes: D24 E23 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ofce.sciences-po.fr/pdf/dtravail/WP2011-21.pdf (application/pdf)

Related works:
Working Paper: The cobb-douglas function as an approximation of other functions (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:1121

Access Statistics for this paper

More papers in Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE) Contact information at EDIRC.
Bibliographic data for series maintained by Francesco Saraceno ().