Questions tagged [ces]
The ces tag has no usage guidance.
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Are homothetic additively separable preferences always equivalent to CES?
Are homothetic additively separable preferences always a monotonic transformation of CES preferences?
In technical language, the question is the following:
Let $n>1$, and let $f:\mathbb{R}^n_{\ge 0}...
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CES price index with heterogeneous productivity
When there is a distribution of productivity, so that different firms have different sale shares, the aggregate CES price index has shares as weights?
References to papers are welcomed.
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Showing that the CES is non-decreasing in the elasticity of substitution
Is this possible? I've been trying so many times, without success, yet if I plot a two good CES on Wolfram, this seems true... I can't find a single numerical example where this does not hold, but I ...
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How to get from a CES production function with inverse elasticity on weights to the special cases Cobb-Douglas & Leontief
I am dealing with a CES production function, and I have attempted some of the "traditional" ways to derive the Cobb-Douglas (logs & l'Hôpital) but I am not sure how to deal with the ...
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on nested CES--derivation issue
I am reading Sachs and Kotlikoff (2012 NBER) and am wondering how they derive one equation in their paper. The setting is the following:
Their model is a variant of the standard two-period ...
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The Intuition of CES Utility
Suppose a (symmetric) CES utility function $$U(\mathbf{x})=\left[\int_{\Omega}\left(x_{\omega}\right)^{\frac{\sigma-1}{\sigma}} d \omega\right]^{\frac{\sigma}{\sigma-1}}, \sigma>1$$
1 The indirect ...
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Derivation of wage rate from nested CES production function
could anyone please help to explain how equation (4) in this paper is derived? I understand that it's an application of first order conditions using the chain rule from equations (1)-(3), but the ...
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An Extension to CES Demand
I am reading a paper with an extended CES final good setting:
The representative household consists of a continuum of members, indexed by $k$
$C_{t}=\int C_{k, t} d k$
$C_{k, t}=\left(\int_{j \in \...
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Cost function from CES production function
How can I find the cost function $c(w,p)$ given that the production is
$$ f(x)=(x_1^p + x_2^p)^{1/p} \ \ for\ \ 0<p <1 $$
I tried to solve it and found that
$$TC(y) = \left\{
\begin{...
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Marshall demand for simple CES utility
Assume that preferences are given by a utility function is given
$$u(x_1,x_2) = (x_1^\rho + x_2^\rho)^{1/\rho}$$
what then are the Marshall demand given budget constraint
$$p_1x_1 + p_2x_2 \leq I$$
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