Algorithm for Econometric Estimation of the Aggregated Production Function by Transcendental Logarithmic (translog) Approximation

Authors

Keywords
aggregate production functions, Cobb-Douglas production function, Constant Elasticity of Substitution (CES) Production Function, Variable Elasticity of Substitution (VES) Production Function, Constant Returns to Scale, Transcendental logarithmic (translog) approximation, Taylor series

Summary
The study analyzes the dependence of gross domestic product of the number of employees and gross fixed capital formation in Bulgaria with the help of the aggregate production function. Based on quarterly data, which covered the first quarter of 1996 to the first quarter of 2007, is examined the elasticity of substitution of production factors. It is tested three types of production functions – a production function with variable elasticity of substitution of factors (VES-function), a production function with constant elasticity of substitution of factors (CES-function) and classical Cobb-Douglas function. Estimates of the parameters were obtained with the least squares method, applied to transcendental logarithmic (translog) approximation of the production function.

JEL: C52, O47
Pages: 38
DOI: 

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