SOME ISSUES OF ECONOMETRIC ASSESSMENT OF CES FUNCTIONS AND THEIR PRACTICAL APPLICATION IN ECONOMIC PROBLEMS
19.11.2023
International Scientific Journal "Science and Innovation". Series A. Volume 2 Issue 11
Usmanova Dilfuza Ilhomovna, Usmanov Farzod Shokhrukhovich
Abstract. This article is devoted to some issues of approximate estimation of functions with constant elasticity of substitution. The constant elasticity of substitution (CES) function is becoming popular in many areas of economics, but it is rarely used in econometric analysis because it cannot be estimated by standard linear regression methods. In this article, the author will reveal existing approaches to econometric assessment of this function and consider several examples of empirical assessment of the function using R software (micEconCES package).
Keywords: CES – function, loglinearization of the model, Taylor series, Kmenta method, running the model in R language
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