The Time Augmented Cobb-Douglas Production Function

The main objective of this paper is to propose and verify a time augmentation of the Cobb-Douglas production function parameters which should be able to capture changing conditions over time. The parameters are estimated via the nonlinear least squares method. As data a time series including production and its sources, labour and capital, in the construction industries of six Central European countries for the period 1995-2015 is used. Our results, based on calculation of R2 and Theil's U, prove that the models containing the time augmented parameters are better than the basic one. Also a verification of evaluated models using the economic reality for each country is given. In addition to the superiority of the time augmented models, these are applicable to distinguish the specifics of the development of productivity in individual countries.O

Optimal Conversion Management for Spruce-dominated Forests: the Case of Drahanska Highlands

With climate change, restoration of natural tree species in areas planted artificially with Norway spruce (Picea abies (L). Karst.) is among the main issues in Central European forest management. However, information on particular forest conversion strategies and on understanding their economic consequences are incomplete. To contribute, we develop a deterministic finite-time dynamic optimization model to understand the driving forces in the economically optimal conversion of spruce-dominated forests planted outside of natural conditions in South Moravia, Czech Republic. In addition to the commonly researched European beech (Fagus sylvatica (L.)), we also consider oak (Quercus (sp.)), Scots pine (Pinus sylvestris (L.) Karst.), and larch (Larix decidua) as alternatives to spruce and evaluate them from an economic point of view. The model recommends a steady reduction of the spruce fraction, replacing it preferably with oak, beech, and larch. The model validation shows that such a forest plan appears both ecologically advisable and economically optimal.O

Statistics Born in Brewery

One of the most important statistical tools is the t-test and its associated Student distribution. These techniques resulted from the work of W. S. Gosset, who published under the pseudonym Student. This paper presents the biographical facts and context of Gosset’s statistical research with his work at the Guinness Brewery. Gosset’s collaboration with important personalities of that time and his work are described. His core article, which laid the foundations of the small sample theory, is discussed in more detail

Productivity Development in Selected Central European Countries Measured by the Sato Production Function

In this paper, we investigate the relationship between economic output, labour and capital in the Visegrád Four, Austria and Germany. The main objective is to determine the type of technological progress in these countries over time, specifically in the period 1995-2015. The Sato production functions (a special case of the linearly homogeneous production function) for all the aforementioned countries are estimated using linear and nonlinear techniques. In addition to the original Sato production function, we propose modifying it in using a time variable, which allows us to analyse the development of productivity over time. Based on the NLS estimates of this modification, we create isoquant maps and calculate the value of the marginal rate of technical substitution of labour for capital to identify the nature of technological progress typical for each country. We also compare the properties of both the OLS and NLS estimates. The results are quite specific to individual countries, but there is some room for generalization