We study the optimal consumption, investment, and life insurance decision of an investor with power utility and an uncertain lifetime. To separate risk aversion from elasticity of inter-temporal substitution, we introduce certainty equivalents. We propose a time-inconsistent global optimization problem,...
The application of the methods to the Soviet data showed a decreasing trend in productivity growth and a low elasticity of substitution of approximately 0.25. The results neither reject nor support the extensive growth hypothesis because of uncertainty in the interpretation of the low elasticity of ...
The property whereby a solid material changes its shape and size under action of opposing forces, but recovers its original configuration when the forces are removed. The existence of forces which tend to restore to its original position any part of a medium (solid or fluid) which has been di...
The elasticity of substitution between capital and labor (\unicodex03C3) is usually considered a “deep parameter”. This paper shows, in contrast, that\unicodex03C3is affected by both globalization and technology, and that different intensities in these drivers have different consequences for the OE...
“the process of economic development itself might shift the over-all elasticity of substitution” (p. 247). As the AES can be interpreted as an efficiency parameter of the macroeconomy, what determines it becomes an important topic but very little has been done so far in the literature.7...
Elasticity of Demand Explained Elastic demand equates to flexibility in purchasing decisions — whether in quantities purchased, the chosen brand or product substitution. Inelastic demand is unwavering, up to a point. For this reason, reducing elasticity is often considered to be a marketer’s primar...
For example, in many common CGE frameworks, this demand function arises from a constant elasticity of substitution (CES) cost or utility function in which buyers regard home and foreign varieties as imperfect substitutes. This is known as the Armington assumption (and σ is sometimes referred to ...
These studies were identified using ECONLIT and searching for the terms “intertemporal elasticity of substitution” or “elasticity of intertemporal substitution” or “intertemporal substitution elasticity” combined with “United Kingdom” or “UK” anywhere in the text. ...
The interpretation of the temporal dimension of cross-sectional or panel data is also subject to discussion. Results based on such data are most commonly considered as medium- to long-run responses, considering they rely on the comparison of different households in different situations taken as ...
Direct substitution of Eq. (10) into Eqs. (3, 4) reveals that the equations of motion are invariant under parity if and only if C21 and C12 are zero. Hence, we say that C21 and C12 are micropolar moduli. It is useful to parameterize the C(ω) as $$\left[\begin{array}{cc}{C}...