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A flexible dynamic model of multiproduct technology for the West German economy
Author(s) -
Nakamura Shinichiro
Publication year - 1986
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.3950010404
Subject(s) - german , aggregate (composite) , economics , product (mathematics) , function (biology) , econometrics , matrix (chemical analysis) , german economy , process (computing) , symmetry (geometry) , matrix model , mathematical economics , computer science , mathematics , materials science , geometry , archaeology , evolutionary biology , biology , composite material , history , operating system , mathematical physics , string (physics)
This paper tests symmetry and negativity of the Slutsky matrix for a system of demand functions derived from an aggregate model of multi product technology within a flexible dynamic framework. The model considers three inputs and three outputs, including imports and exports of intermediate goods. We derive a static demand model from a trans log cost function and specify the data generation process by a stationary ARX (1, 1) model. Results based on West German quarterly data indicate that the integrability conditions are not rejected when imposed on the ARX (1, 1) model, whereas they are rejected for all the less general dynamic models considered.