Elasticity for economic processes with memory: Fractional differential calculus approach

By Valentina V. Tarasova, Vasily E. Tarasov. 2016

68 citations recorded by the source corpus.

Derivatives of non-integer orders are applied to generalize notion of elasticity in framework of economic dynamics with memory. Elasticity of Y with respect to X is defined for the case of a finite-interval fading memory of changes of X and Y . We define generalizations of point price elasticity of demand to the case of processes with memory. In these generalizations we take into account dependence of demand not only from current price (price at current time), but also all changes of prices for some time interval. For simplification, we will assume that there is one parameter, which characterizes a degree of damping memory over time. The properties of the suggested fractional elasticities and examples of calculations of these elasticities of demand are suggested.

Subfields: Applied Mathematics, Economics and Econometrics, Modeling and Simulation

View Paper: https://www.semanticscholar.org/paper/6ba6eda35fe915b578f412bdd7520a8f141e8b19

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In Applied Mathematics

In Economics and Econometrics

In Modeling and Simulation

Citations in the corpus

Application of fractional differential equation in economic growth model: A systematic review approach (2021, background): “The application of fractional derivatives to generalize ideas in the framework of solving economic dynamics problems by involving memory effects can be found in [32].”
Economic interpretation of fractional derivatives (2017, methodology): “Recently, non-integer order derivatives have been used to describe the financial processes [6, 7, 8, 9, 10] and the economic processes with memory and [14, 15, 16, 17, 18].”