Related papers: Econometric Modeling of Input-Driven Output Risk t…
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…
In their seminal 1928 work, Charles Cobb and Paul Douglas empirically validated the Cobb-Douglas production function through statistical analysis of U.S. economic data from 1899 to 1923. While this established the function's theoretical…
Sector specific multifactor CES elasticity of substitution and the corresponding productivity growths are jointly measured by regressing the growths of factor-wise cost shares against the growths of factor prices. We use linked input-output…
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…
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 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…
Foundation models often generate unreliable answers, while heuristic uncertainty estimators fail to fully distinguish correct from incorrect outputs, causing users to accept erroneous answers without any statistical guarantee. We address…
We provide four novel results for nonhomothetic Constant Elasticity of Substitution preferences (Hanoch, 1975). First, we derive a closed-form representation of the expenditure function of nonhomothetic CES under relatively flexible…
We develop a generalized control function approach to production function estimation. Our approach accommodates settings in which productivity evolves jointly with other unobservable factors such as latent demand shocks and the…
We propose a general approach for supervised learning with structured output spaces, such as combinatorial and polyhedral sets, that is based on minimizing estimated conditional risk functions. Given a loss function defined over pairs of…
Systemic risk is the risk that a company- or industry-level risk could trigger a huge collapse of another or even the whole institution. Various systemic risk measures have been proposed in the literature to quantify the domino and…
The cross-entropy (CE) method is a popular stochastic method for optimization due to its simplicity and effectiveness. Designed for rare-event simulations where the probability of a target event occurring is relatively small, the CE-method…
We develop new econometric methods for estimation and inference in high-dimensional panel data models with interactive fixed effects. Our approach can be regarded as a non-trivial extension of the very popular common correlated effects…
This paper presents a new nested production function that is specifically designed for analyzing capital and labor intensity of manufacturing industries in developing and developed regions. The paper provides a rigorous theoretical…
We study the cross-entropy method (CEM) for the non-convex optimization of a continuous and parameterized objective function and introduce a differentiable variant that enables us to differentiate the output of CEM with respect to the…
Structural equation modeling (SEM) is a prevalent approach for studying constructs.Traditionally, these constructs are modeled as reflectively measured latent variables - common factors that account for the variance-covariance structure of…
The Constant Elasticity of Variance (CEV) model is mathematically presented and then used in a Credit-Equity hybrid framework. Next, we propose extensions to the CEV model with default: firstly by adding a stochastic volatility diffusion…
We introduce and study nonlinear production - consumption equilibrium (NPCE). The NPCE is a combination and generalization of both classical linear programming (LP) and classical input-output (IO) models. In contrast to LP and IO the NPCE…
We address the statistical estimation of composite functionals which may be nonlinear in the probability measure. Our study is motivated by the need to estimate coherent measures of risk, which become increasingly popular in finance,…
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'…