We try to argue that in a computable general equilibrium model, household preferences should be modeled by the indirect addilog system (IAS), exhibiting constant differences of elasticity of substitution (CDES), rather than by the frequently used linear expenditure system (LES). Both systems...

In this paper, we unify and extend the analytical and empirical application of the ”indirect addilog” expenditure system, introduced by Leser (1941), Somermeyer- Wit (1956) and Houthakker (1960). Using the Box-Cox transform, we present a parametric analysis of the Houthakker specification of...