The Morishima Gross elasticity of substitution
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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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|
|Number of Pages:||22|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
Allen, G. D.,and J. R. Hicks. “A Reconsideration of the Theory of Value, Part II.” (1934). Economica 1, 196–219.
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