Page 89 - 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

Thus we can say that this method combined the declining gradient and

Newton-Gauss methods. The main idea of this method is that in cases with high

level of non-linearity (till the moment when distribution between iterative and

searched solutions is large enough) we use the large quantities for (gradient

method), when we approach to seached solution we the value of is decreasing.

Thus process gives an opportunity to approach to the desired solution at shortest

time.

Described above method is called Marward method. The following

algorithm is proposed for identification of Marward number:

1) Initial value , is accepted;

2) When –starts to decrease in one step figure increases times

increases by 10 times);

3) The value of is increased by times by 0,1 times), obtained

amount is accepted as new initial value.

1) -3) are the main iterations of this method (increase or decrease of S

depends on level of non-linearity).

In order to reduce the volume of calculations and interpretations we suggest

to use the following formula:

(9)

Here,

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