Blackorby, Charles, Primont, Daniel and Russell, R. Robert (2007) The Morishima Gross elasticity of substitution. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.787).

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Abstract

We show that the Hotelling-Lau elasticity of substitution, an extension of the Allen-Uzawa elasticity to allow for optimal output-quantity (or utility) responses to changes in factor prices, inherits all of the failings of the Allen-Uzawa elasticity identified by Blackorby and Russell [1989 AER]. An analogous extension of the Morishima elasticity of substitution to allow for output quantity changes preserves the salient properties of the original Hicksian notion of elasticity of substitution.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Elasticity (Economics), Demand (Economic theory), Substitution (Economics), Factor analysis
Series Name:	Warwick economic research papers
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry
Official Date:	January 2007
Dates:	Date Event January 2007 Published
Number:	No.787
Number of Pages:	22
Institution:	University of Warwick
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access (Creative Commons)

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