Abstract
Diewert and Wales have recently introduced the concept of semiflexibility. Compared to their flexible counterparts, semiflexible functional forms allow for large savings in terms of parameters, while they are still able to provide second-order approximations to arbitrary functions under some conditions. We examine the empirical legitimacy of semiflexibility by estimating the U.S. demand for imports and supply of exports by commodity group. Imports are disaggregated into nine components, and exports into eight. We find that the reduction in flexibility is not incompatible with the data. This suggests that semiflexibility is a useful tool in the estimation of large models.
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