Page 87 - Azerbaijan State University of Economics

Yadulla H. Hasanli: The evaluation of mutual substitution elasticity of capital and labour
factors by application of CES function for economy of Azerbaijan

The approximate value obtained on k-th step of the iterative process the

next approximate value are linked with each other with correcting vector .

(6)

The correcting vector could be found in conditions of minimization using

the following formula.

(7)

Here, . The matrix is the matrix of the first special

derivative of U. In other words it is Yacobi matrix.

The elements of matrix A are calculated for point .

This formula is the basic formula in iteration in respect of Newton-Gauss

formula. When we use the Newton-Gauss method the more non-linear

characteristics of f(x) and deviation between initial value and minimum value,

the more is the possibility of failure of iterative process.

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