IDEAS home Printed from https://ideas.repec.org/a/hin/complx/5617061.html
   My bibliography  Save this article

A Grey CES Production Function Model and Its Application in Calculating the Contribution Rate of Economic Growth Factors

Author

Listed:
  • Maolin Cheng

Abstract

In analyses of economic growth factors, people generally use the CES (Constant Elasticity of Substitution) production function model to calculate the contribution rates of the factors that influence economic growth. However, the traditional CES function model that is built directly from economic data often shows apparent errors in parameter estimation due to data fluctuations. Such a model also may cause a negative calculation of the contribution rates of economic growth factors, or it may create abnormal fluctuations for some periods, and thus it fails to meet economic growth laws. In this paper, we propose a grey CES production function that can eliminate the random fluctuations of data and make the estimated parameters more reasonable, and this model can reflect the relationship between inputs and outputs more accurately. With regard to model application, the paper puts forward a scientific calculation method to avoid the calculation deviations caused by the substitution of difference equation for a differential equation with Solow’s formula. With the grey two-level nested CES production function model and the calculation method proposed, the paper makes an empirical analysis of the contribution rates of factors that influence China’s economic growth.

Suggested Citation

  • Maolin Cheng, 2019. "A Grey CES Production Function Model and Its Application in Calculating the Contribution Rate of Economic Growth Factors," Complexity, Hindawi, vol. 2019, pages 1-8, April.
    • Handle: RePEc:hin:complx:5617061
    DOI: 10.1155/2019/5617061
    as

    Download full text from publisher

    File URL: http://downloads.hindawi.com/journals/8503/2019/5617061.pdf
    Download Restriction: no
    File URL: http://downloads.hindawi.com/journals/8503/2019/5617061.xml
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2019/5617061?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zha, Donglan & Kavuri, Anil Savio & Si, Songjian, 2018. "Energy-biased technical change in the Chinese industrial sector with CES production functions," Energy, Elsevier, vol. 148(C), pages 896-903.
    2. Sriram Shankar & B. Bhaskara Rao, 2012. "Estimates of the long-run growth rate of Singapore with a CES production function," Applied Economics Letters, Taylor & Francis Journals, vol. 19(15), pages 1525-1530, October.
    3. Liqun Wang & Alexandre Leblanc, 2008. "Second-order nonlinear least squares estimation," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 60(4), pages 883-900, December.
    4. Kemfert, Claudia, 1998. "Estimated substitution elasticities of a nested CES production function approach for Germany," Energy Economics, Elsevier, vol. 20(3), pages 249-264, June.
    5. Carrara, Samuel & Marangoni, Giacomo, 2017. "Including system integration of variable renewable energies in a constant elasticity of substitution framework: The case of the WITCH model," Energy Economics, Elsevier, vol. 64(C), pages 612-626.
    6. Ravelojaona, Paola, 2019. "On constant elasticity of substitution – Constant elasticity of transformation Directional Distance Functions," European Journal of Operational Research, Elsevier, vol. 272(2), pages 780-791.
    7. Yong He & Siwei Gao & Nuo Liao, 2016. "An Intelligent Computing Approach to Evaluating the Contribution Rate of Talent on Economic Growth," Computational Economics, Springer;Society for Computational Economics, vol. 48(3), pages 399-423, October.
    8. Pollard, David & Radchenko, Peter, 2006. "Nonlinear least-squares estimation," Journal of Multivariate Analysis, Elsevier, vol. 97(2), pages 548-562, February.
    9. Klump, Rainer & Saam, Marianne, 2008. "Calibration of normalised CES production functions in dynamic models," Economics Letters, Elsevier, vol. 99(2), pages 256-259, May.
    10. Yazid Dissou & Lilia Karnizova & Qian Sun, 2015. "Industry-level Econometric Estimates of Energy-Capital-Labor Substitution with a Nested CES Production Function," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(1), pages 107-121, March.
    11. Zeng, Bo & Wei, Xuan & Zhao, Dongbo & Singh, Chanan & Zhang, Jianhua, 2018. "Hybrid probabilistic-possibilistic approach for capacity credit evaluation of demand response considering both exogenous and endogenous uncertainties," Applied Energy, Elsevier, vol. 229(C), pages 186-200.
    12. Zha, Donglan & Zhou, Dequn, 2014. "The elasticity of substitution and the way of nesting CES production function with emphasis on energy input," Applied Energy, Elsevier, vol. 130(C), pages 793-798.
    13. Yasushi Nakamura, 2015. "Productivity versus elasticity: a normalized constant elasticity of substitution production function applied to historical Soviet data," Applied Economics, Taylor & Francis Journals, vol. 47(53), pages 5805-5823, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cheng, Maolin & Han, Yun, 2020. "Application of a modified CES production function model based on improved PSO algorithm," Applied Mathematics and Computation, Elsevier, vol. 387(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cheng Maolin & Shi Guojun & Han Yun, 2019. "A Modified CES Production Function Model and Its Application in Calculating the Contribution Rate of Energy and Other Influencing Factors to Economic Growth," Journal of Systems Science and Information, De Gruyter, vol. 7(2), pages 161-172, April.
    2. Cheng, Maolin & Han, Yun, 2020. "Application of a modified CES production function model based on improved PSO algorithm," Applied Mathematics and Computation, Elsevier, vol. 387(C).
    3. Zhu, Xuehong & Zeng, Anqi & Zhong, Meirui & Huang, Jianbai, 2021. "Elasticity of substitution and biased technical change in the CES production function for China's metal-intensive industries," Resources Policy, Elsevier, vol. 73(C).
    4. Paul E. Brockway & Matthew K. Heun & João Santos & John R. Barrett, 2017. "Energy-Extended CES Aggregate Production: Current Aspects of Their Specification and Econometric Estimation," Energies, MDPI, vol. 10(2), pages 1-23, February.
    5. Cheng Maolin, 2016. "A Generalized Constant Elasticity of Substitution Production Function Model and Its Application," Journal of Systems Science and Information, De Gruyter, vol. 4(3), pages 269-279, June.
    6. Meran, Georg, 2019. "Thermodynamic constraints and the use of energy-dependent CES-production functions A cautionary comment," Energy Economics, Elsevier, vol. 81(C), pages 63-69.
    7. Lagomarsino, Elena, 2020. "Estimating elasticities of substitution with nested CES production functions: Where do we stand?," Energy Economics, Elsevier, vol. 88(C).
    8. Malliet, Paul & Reynès, Frédéric G., 2022. "Empirical estimates of the elasticity of substitution of a KLEM production function without nesting constraints: The case of the Variable Output Elasticity-Cobb Douglas," Conference papers 333423, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Trenczek, Jan & Wacker, Konstantin M., 2023. "Human Capital Misallocation and Output per Worker Differences: Beyond Cobb-Douglas," GLO Discussion Paper Series 1331, Global Labor Organization (GLO).
    10. Elena Lagomarsino & Karen Turner, 2017. "Is the production function Translog or CES? An empirical illustration using UK data," Working Papers 1713, University of Strathclyde Business School, Department of Economics.
    11. Valeria Costantini & Francesco Crespi & Elena Paglialunga, 2019. "Capital–energy substitutability in manufacturing sectors: methodological and policy implications," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 157-182, June.
    12. Matthew K. Heun & João Santos & Paul E. Brockway & Randall Pruim & Tiago Domingos & Marco Sakai, 2017. "From Theory to Econometrics to Energy Policy: Cautionary Tales for Policymaking Using Aggregate Production Functions," Energies, MDPI, vol. 10(2), pages 1-44, February.
    13. Zha, Donglan & Kavuri, Anil Savio & Si, Songjian, 2018. "Energy-biased technical change in the Chinese industrial sector with CES production functions," Energy, Elsevier, vol. 148(C), pages 896-903.
    14. Michael Knoblach & Fabian Stöckl, 2020. "What Determines The Elasticity Of Substitution Between Capital And Labor? A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 847-875, September.
    15. Zha, Donglan & Kavuri, Anil Savio & Si, Songjian, 2017. "Energy biased technology change: Focused on Chinese energy-intensive industries," Applied Energy, Elsevier, vol. 190(C), pages 1081-1089.
    16. Li, Wei & Lu, Can & Ding, Yi & Zhang, Yan-Wu, 2017. "The impacts of policy mix for resolving overcapacity in heavy chemical industry and operating national carbon emission trading market in China," Applied Energy, Elsevier, vol. 204(C), pages 509-524.
    17. Simon Koesler & Michael Schymura, 2015. "Substitution Elasticities In A Constant Elasticity Of Substitution Framework - Empirical Estimates Using Nonlinear Least Squares," Economic Systems Research, Taylor & Francis Journals, vol. 27(1), pages 101-121, March.
    18. Hepburn, Cameron & Teytelboym, Alexander & Cohen, Francois, 2018. "Is Natural Capital Really Substitutable?," INET Oxford Working Papers 2018-12, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    19. Henningsen, Arne & Henningsen, Geraldine & van der Werf, Edwin, 2019. "Capital-labour-energy substitution in a nested CES framework: A replication and update of Kemfert (1998)," Energy Economics, Elsevier, vol. 82(C), pages 16-25.
    20. An, Kangxin & Wang, Can & Cai, Wenjia, 2023. "Low-carbon technology diffusion and economic growth of China: an evolutionary general equilibrium framework," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 253-263.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hin:complx:5617061. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mohamed Abdelhakeem (email available below). General contact details of provider: https://www.hindawi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.