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Functional Separability and the Existence of Consistent Aggregates in U.S. Manufacturing

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  • Yuhn, Ky-Hyang

Abstract

The traditional separability tests, which are based on the translog production or cost function, involve some drawbacks in terms of theoretical consistency as well as empirical implications. This study proposes a new method for testing functional separability, employing an indirect production function formulation, and tests the existence of a consistent real value-added aggregate in U.S. manufacturing. The author's approach provides a preferable alternative to the existing methods, such as Berndt-Christensen's exact separability tests and Denny-Fuss's approximate separability tests, in investigating the nature of separability. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Yuhn, Ky-Hyang, 1991. "Functional Separability and the Existence of Consistent Aggregates in U.S. Manufacturing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(1), pages 229-250, February.
    • Handle: RePEc:ier:iecrev:v:32:y:1991:i:1:p:229-50
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    Cited by:

    1. Kyoji Fukao & Tsutomu Miyagawa & Hak Kil Pyo & Keun Hee Rhee, 2012. "Estimates of Total Factor Productivity, the Contribution of ICT, and Resource Reallocation Effects in Japan and Korea," Chapters, in: Matilde Mas & Robert Stehrer (ed.), Industrial Productivity in Europe, chapter 9, Edward Elgar Publishing.
    2. Richmond, J, 2000. "Separability and Specification Tests," Economics Discussion Papers 8832, University of Essex, Department of Economics.
    3. Frondel, Manuel, 2004. "Empirical assessment of energy-price policies: the case for cross-price elasticities," Energy Policy, Elsevier, vol. 32(8), pages 989-1000, June.

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