A new production function estimate of the euro area output gap

Lemoine, Matthieu; Mazzi, Gian Luigi; Monperrus-Veroni, Paola; Reynès, Frédéric

doi:10.1002/for.1157

Cited by 8 publications

(9 citation statements)

References 30 publications

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“…As it leads to linear input demands that are general in terms of substitution possibilities, it may prove promising in the econometric analysis of the producer. In this respect, the attempt made by Lemoine et al (2010) to estimate a VOE-CD function in the euro area in the case of two inputs (labor and capital) gave promising results. It could be extended to account for energy substitutions and by applying the approach developed by León-Ledesma et al (2010) that allows for a robust and joint identification of the ES and the biased technical change parameters.…”

Section: Discussionmentioning

confidence: 99%

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The Cobb–Douglas function as a flexible function

Reynès

2019

Mathematical Social Sciences

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h i g h l i g h t s • We introduce the Variable Output Elasticities Cobb-Douglas production function. • This flexible function provides a generalization of the CES function. • It has advantages compared to existing flexible functions (e.g. Translog function). • It leads to linear input demands and facilitates the analyze of input substitution. • The case of substitutions between energy, capital and labor is provided.

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Section: Discussionmentioning

confidence: 99%

“…Blanchard and Kiyotaki, 1987). As we did in Lemoine et al (2010) in the case of two inputs (labor and capital), the factor demand Eqs. (16) and (17) can also be obtained by linearizing the input demands derived from a CES production function.…”

Section: The Demand For Inputsmentioning

confidence: 92%

The Cobb–Douglas function as a flexible function

Reynès

2019

Mathematical Social Sciences

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“…Among modern scholars should be noted Hrabovetskyi (2006), Pavelescu (2011), Lewin (2000), Mazzi and Lemoine (2010), Solow (1957), Shumska (2007a).…”

Section: Analysis Of Recent Research and Publicationsmentioning

confidence: 99%

Production Forecasting and Evaluation of Investments Using Allen Two-Factor Production Function

Koval¹,

Slobodianiuk²,

Yankovyi³

2018

BJES

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Abstract. The purpose of the article is to substantiate and systematize theoretical knowledge about Allen production function and it is an attempt to apply it in the tasks of modelling, analysis, and production forecasting at enterprises. Methodology. In the presented work, estimation's questions of unknown parameters of Allen function based on the least squares method and regression analysis on the basis of standard programs of the Excel are discussed; its belonging to neoclassical functions, as well as the most important economic and mathematical characteristics. In particular, in the framework of Allen production function, the formulas for average return of resources (capital productivity and productivity), marginal returns of resources, elasticity of output on factors need for productive resources, when there is a production output and one of the factors is given, also the replacement of resources (capital assets), the marginal rate of substitution of factors, the elasticity of replacement of resources (labour with capital). Results. Based on the assumption that Allen function belongs to the group of substitutional functions according to the equivalence principle, the formula of optimal capital formation is determined, which maximizes output at given total capital expenditures on the main production funds and labour remuneration (minimizes the total capital expenditures for a given volume of production). In addition, the calculation formulas for determining the maximum output (minimum total cost of capital) in terms of optimal capital stock are given. All the above indicators are summarized in the summary table of the main economic and mathematical characteristics of Allen production function. Practical implications. In the case when the model is based on empirical data that varies in time, for example, at one enterprise in a number of years, we are proposed to use the dynamic Allen production function, which explicitly includes the time factor. In both cases, the volume of the information base (sample size) is determined, which will ensure the representativeness of future conclusions regarding unknown parameters that are subject to evaluation. The article also considers Allen production function as an instrument for evaluating the economic efficiency of future investment in production in the usual and dynamic variants. Value/originality. The obtained theoretical and methodological aspects of Allen two-factor production function are illustrated in a practical example of construction, economic interpretation, and practical use of the model.

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“…Dans cette partie, en retenant l'approche en fonction de production décrite précédemment, nous estimons les valeurs potentielles de chaque facteur de production dans un sousmodèle de type MCI. Nous reprenons ici un modèle proche de celui de Lemoine et al (2010). La principale différence porte sur la technologie qui est ici de type Cobb-Douglas et non de type CES et, en conséquence, sur la prise en compte explicite du stock de capital 5 .…”

Section: Le Modèle à Composantes Inobservables Retenuunclassified