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dc.contributor.authorFelipe, Jen_NZ
dc.contributor.authorMcCombie, John S Len_NZ
dc.date.available2011-04-07T03:05:04Z
dc.date.copyright2001-09en_NZ
dc.identifier.citationFelipe, J., & McCombie, J. S. L. (2001). How sound are the foundations of the aggregate production function? (Economics Discussion Papers Series No. 116). University of Otago. Retrieved from http://hdl.handle.net/10523/824en
dc.identifier.urihttp://hdl.handle.net/10523/824
dc.description.abstractThe aggregate production function has been subject to a number of criticisms ever since its first empirical estimation by Cobb and Douglas in the 1920s, notably the problems raised by aggregation and the Cambridge Capital Theory Controversies. There is a further criticism due initially to Phelps Brown (and elaborated, in particular, by Simon and Shaikh) which is not so widely known. This critique is that because at the aggregate level only value data can be used to estimate production function, this means that the estimated parameters of the production function are merely capturing an underlying accounting identity. Hence, no reliance can be placed on estimates of, for example, the elasticity of substitution as reflecting technological parameters. The argument also explains why good statistical fits of the aggregate production functions are obtained, notwithstanding the difficulties posed by the aggregation problem and the Cambridge Capital Controversies noted above. This paper outlines and assesses the Phelps Brown critique and its extensions. In particular, it considers some possible objections to his argument and demonstrates that they are not significant. It is concluded that the theoretical basis of the aggregate production function is problematic.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/DP0116.pdfen_NZ
dc.subjectCobb-Douglasen_NZ
dc.subjectproduction functionen_NZ
dc.subjectincome identityen_NZ
dc.subject.lcshHB Economic Theoryen_NZ
dc.titleHow sound are the foundations of the aggregate production function?en_NZ
dc.typeDiscussion Paperen_NZ
dc.description.versionUnpublisheden_NZ
otago.bitstream.pages34en_NZ
otago.date.accession2006-02-28en_NZ
otago.schoolEconomicsen_NZ
otago.openaccessOpen
otago.place.publicationDunedin, New Zealanden_NZ
dc.identifier.eprints269en_NZ
otago.school.eprintsEconomicsen_NZ
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otago.relation.number116en_NZ
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