Questions tagged [ces]
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6
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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 ...
- 11
3
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1
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128
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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 ...
- 2,021
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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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3
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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 \...
- 2,021
2
votes
1
answer
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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
$$TC(y) = \left\{
\begin{...
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76
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Marshall demand for simple CES utility
Assume that preferences are given by a utility function is given
$$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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