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dc.contributor.authorFelipe, Jen_NZ
dc.contributor.authorMcCombie, John S Len_NZ
dc.date.available2011-04-07T03:06:25Z
dc.date.copyright2001-09en_NZ
dc.identifier.citationFelipe, J., & McCombie, J. S. L. (2001). A problem with some estimations and interpretations of the mark-up in manufacturing industry (Economics Discussion Papers Series No. 117). University of Otago. Retrieved from http://hdl.handle.net/10523/1078en
dc.identifier.urihttp://hdl.handle.net/10523/1078
dc.description.abstractThis paper evaluates the methodological foundations of some recent attempts to estimate econometrically the degree of market power and the degree of returns to scale in manufacturing. The method discussed is based on estimating the aggregate production function in growth rate form. It is argued, following an argument made in another context by Phelps Brown, Shaikh, and Simon, that as the data used in empirical analyses are in value terms (i.e., monetary values at constant prices), the parameter derived as a mark-up can be reinterpreted simply as a coefficient from the income accounting identity, which takes a value of unity subject to omitted variable bias. Thus, it cannot be unambiguously interpreted as a mark-up. It is also shown that the large estimates of the degree of increasing returns to scale are similarly flawed. The argument also has implications for understanding cyclical fluctuations of the Solow residual, which turns out to be largely the result of the procyclical fluctuations of the profit rate. We conclude by questioning whether the aggregate production function can ever be statistically tested, or, in other words, whether it is capable of being refuted, as opposed to its parameters being merely estimated.en_NZ
dc.format.mimetypeapplication/pdf
dc.publisherUniversity of Otagoen_NZ
dc.relation.ispartofseriesEconomics Discussion Papers Seriesen_NZ
dc.relation.urihttp://www.business.otago.ac.nz/econ/research/discussionpapers/DP0117.pdfen_NZ
dc.subject.lcshHB Economic Theoryen_NZ
dc.titleA problem with some estimations and interpretations of the mark-up in manufacturing industryen_NZ
dc.typeDiscussion Paperen_NZ
dc.description.versionUnpublisheden_NZ
otago.bitstream.pages45en_NZ
otago.date.accession2006-02-28en_NZ
otago.schoolEconomicsen_NZ
otago.openaccessOpen
otago.place.publicationDunedin, New Zealanden_NZ
dc.identifier.eprints268en_NZ
otago.school.eprintsEconomicsen_NZ
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