We will focus on a promising venue, namely, quantum probability as a measure of uncertainty, since, unlike Kolmogorov probability, quantum probability, borrowed from quantum physics, is non-additive and non-commutative, thus avoiding Ells-berg's paradox (of von Neumann's expected utility) and capturing order effects of human judgements, respectively. These include economic equilibrium problem where fixed point theory for Markov operators, and for ordered sets is needed the emergent field of behavioral economics (Nobel Memorial Prize in Economics 2017) where more mathematical research is needed, for example, to capture cognitive decision-making, affecting economic data, and hence econometric modeling processes. We present a variety of issues in modern economics where applied mathematics is needed. This finding shows that Vietnamese nonfinancial enterprises can confront a downward trend of output growth. By performing Bayesian nonlinear mixed-effects regression via Random-walk Metropolis Hastings (MH) algorithm, based on the data set of the listed nonfinancial enterprises of Vietnam, the author found that the CES function estimated for the researched enterprises has an ES lower than one, i.e., capital and labor are complimentary. So, this study is conducted to estimate the average ES through the specification of an aggregate CES function for the Vietnamese nonfinancial enterprises. The CES (constant elasticity of substitution) production function with more flexible presumptions, concretely its ES, is not unitary, and has been used more and more widely in economic investigations. Extremely rigid presumptions are a main weak point of this functional form, particularly if the elasticity of factor substitution (ES) is equal to one, which hides the role of the ES for economic growth. Most studies in Vietnam use the Cobb-Douglas production function and its modifications for economic analysis. Keywords: VES function, elasticicty of factor substitution, endogenous growth, Bayesian nonlinear regression, CES. Originality/Value: Although this study organically builds upon recent studies about the link between the VES, the elasticity of factor subsitution and economic growth, its results proved that the VES is more appropriate than the Cobb-Douglas and the Constant Elasticity of Substitution (CES) to explain economic growth in the view of capital-labor relationship.
To raise the level of science and technique, as well as human capital of the Vietnamese enterprises, at the same time, there is great necessity to encourage R&D activities in both the private and public sectors. Practical implications: Based on the empirical results, in order to realize the possibility of endogenous growth for the studied Vietnamese manufacturing sector, policies of enforcing investment are needed. This result points to the possibility of unbounded endogenous growth in the Vietnamese manufacturing sector. The Bayesian nonlinear regresion performed is suitable for fitting production functions and depicting economic growth.įindings: The specified VES function has the ES greater than one and this finding contradicts many previous empirical studies in the growth theory. Purpose: To specify a Variable Elasticity of Substitution function (VES), in which the estimated Elasticity of Substitution (ES) can give some implications for the tendency of economic growth in the Vietnames manufacturing sector.ĭesign/Methodology/Approach: The contribution and the relevant methodology is based on the Bayesian approach having some advantages over the frequentist method: (i) the simulation and prediction results are more reliable in Bayesian analysis due to combining prior knowledge about parameters with obverved data to compose a posterior model, whereas the frequentist approach is based only on available data (ii) in probability sense, Bayesian credible intervals have a straightforward interpretation compared to frequentist confidence intervals.
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