A Symmetric Normalized Quadratic GNP Function and the U.S. Demand for Imports and Supply of Exports

This paper reports estimates of a GNP function for the United States using data covering most of the postwar period and it introduces a new functional form, the symmetric normalized quadra tic variable profit function, which is a natural extension of recent wor k by W. E. Diewert and T. J. Wales. This functional form allows convexity in prices and concavity in fixed inputs to be imposed globally. Empirical resu lts indicate that the demand for imports is less price elastic than the supply exports, that an increase in labor endowment favors trade, an d that a deterioration of the terms of trade mostly hurts labor.