Presentation on theme: "AEB 6184 – ALLEN PARTIAL FOR THE CES Elluminate - 4."— Presentation transcript:
AEB 6184 – ALLEN PARTIAL FOR THE CES Elluminate - 4
Fitting the CES Function – Modified Gauss-Siedel Another formulation of the Gauss-Siedel is to formulate the system as a squared-error system. For example consider the CES production function The first-order condition for each input then becomes
Error Objective Function The objective function for the minimization problem then becomes Left to your own, prove that the first-order conditions of Q(.) yields the same conditions as the Gauss-Siedel form.