Related papers: Multifactor CES General Equilibrium: Models and Ap…
We measure elasticity of substitution between foreign and domestic commodities by two-point calibration such that the Armington aggregator can replicate the two temporally distant observations of market shares and prices. Along with the…
Each production establishment is assumed to have, at any given time, a unique combination of capital and labor (a Leontief function), but the aggregate output at that same time must still be modeled with a Cobb-Douglas function (or a CES,…
This paper studies inter-firm heterogeneity in production. Unlike much of the existing research, which primarily addresses heterogeneous production through unobserved fixed effects, our approach also focuses on differences in factors'…
We model sectoral production by serially nesting (cascading) binary compounding processes. The sequence of processes is discovered in a self-similar hierarchical structure stylized in macroscopic input-output transactions. The feedback…
Based on a multisector general equilibrium framework, we show that the sectoral elasticity of substitution plays the key role in the evolution of asymmetric tails of macroeconomic fluctuations and the establishment of robustness against…
The conventional functional form of the Constant-Elasticity-of-Substitution (CES) production function is a general production function nesting a number of other forms of production functions. Examples of such functions include Leontief,…
The main aim of this paper is to prove the existence of a new production function with variable elasticity of factor substitution. This production function is a more general form which includes the Cobb-Douglas production function and the…
As countries develop, the relative importance of agriculture declines and economic activity becomes spatially concentrated. We develop a model integrating structural change and regional disparities to jointly capture these phenomena. A key…
We model sectoral production by cascading binary compounding processes. The sequence of processes is discovered in a self-similar hierarchical structure stylized in the economy-wide networks of production. Nested substitution elasticities…
This paper develops a new generation of the Keynesian Intertemporal Synthesis (KIS) Model, a macroeconomic framework designed to reconcile the empirical strengths of the Post-Keynesian (PK) and New Keynesian (NK) traditions. The central…
We model an economy-wide production network by cascading binary compounding functions, based on the sequential processing nature of the production activities. As we observe a hierarchy among the intermediate processes spanning the empirical…
Industries learn productivity improvements from their suppliers. The observed empirical importance of these interactions, often omitted by input-output models, mandates larger attention. This article embeds interdependent total factor…
How a shock to an individual sector propagates to the prices of other sectors and aggregates to GDP depends on how easily sectoral goods can be substituted in production, which is determined by the intermediate input substitution…
Labor productivity in developed countries is analyzed and modeled. Modeling is based on our previous finding that the rate of labor force participation is a unique function of GDP per capita. Therefore, labor productivity is fully…
Factor analysis is a statistical technique employed to evaluate how observed variables correlate through common factors and unique variables. While it is often used to analyze price movement in the unstable stock market, it does not always…
The article develops a general equilibrium model where power relations are central in the determination of unemployment, profitability, and income distribution. The paper contributes to the market forces versus institutions debate by…
We analyze the effects of energy and commodity prices on commodity output using a three-factor, two-good general equilibrium trade model with three factors: capital, labor, and imported energy. We derive a sufficient condition for each sign…
Dynamic input-output models are standard tools for understanding inter-industry dependencies and how economies respond to shocks like disasters and pandemics. However, traditional approaches often assume fixed prices, limiting their ability…
This research develops a socioeconomic health index for nations through a model-based approach which incorporates spatial dependence and examines the impact of a policy through a causal modeling framework. As the gross domestic product…
This paper presents the identification of heterogeneous elasticities in the Cobb-Douglas production function. The identification is constructive with closed-form formulas for the elasticity with respect to each input for each firm. We…