A Direct Method for Fitting an Exponential Function. to Bivariate Observations

In many economic problems, we are often interested in the growth rate of a variable. Of particular importance is the situation where the rate of growth is constant or approximately constant. This often entails a model which assumes that a unit increase in the independent variable will be accompanied by a fixed proportional increase in the dependent variable, apart from random fluctuations. Under such circumstances, an exponential model of the form