Economic Growth and Optimal Taxation: A Case of Mongolian Economy

Abstract

We examined three cases of Schully model [1] [2] for Mongolian economy. In the first case, we consider the production function with constant returns to scale. In the second case, we employ an econometric model for the production function with none constant return to scale without constraints on parameters of elasticities. Finally, the constrained regression model ha s been implemented by solving a convex minimization problem over a convex set. Also, we have proved that Schully production function namely, “ U shape function” in the literature [1] [2] [3] in fact is concave function under some assumptions.