IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/86368.html
   My bibliography  Save this paper

Test der neoklassischen Produktionsfunktion
[Testing the neoclassical production function]

Author

Listed:
  • Quaas, Georg

Abstract

The Cobb-Douglas production function has applications for firms, branches, industries, and for the macro-economies of nation-states as a whole. Throughout the course of his life, with the exception of his years as a senator, Paul H. Douglas consistently strived to gather all the supporting empirical evidence he could. Among others, he placed his hope in his former student, Paul A. Samuelson, and in Samuelson’s colleague Robert M. Solow, who pushed the production function forward “into new and more sophisticated fields.” Meanwhile, plenty of data on capital, labor, and output are available, but it seems as though no one is interested anymore in either the empirical evidence or the underlying logic of Solow’s sophisticated version of the old Cobb-Douglas theory. In this study, his method of segregating variations in output per head due to technical change from those due to changes in the availability of capital per head is applied to the (West) German economy. The temporal domain covers the development of the West German economy from 1950 to 1990 and after German unification, from 1991 to 2015. Even though it turns out that the underlying, true production functions are very similar, ex post prognoses of real wages with the help of the approximated first derivation of the complete production function are much better in the earlier than in the later period. This raises the question of whether factors are paid their marginal cost. Because the study is thought to serve as teaching material, certain mathematics concerning the production function are added. Several problems regarding the accurate testing of the function on the basis of Germany’s National Account dataset are discussed. Patterns that are consequences of the theory are confronted with empirical evidence resulting from 67 years of economic development. It might well be of political importance that the upward shift of the production function hypothetically caused by technical change has a tendency to fall.

Suggested Citation

  • Quaas, Georg, 2018. "Test der neoklassischen Produktionsfunktion [Testing the neoclassical production function]," MPRA Paper 86368, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:86368
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/86368/1/MPRA_paper_86368.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Quaas, Georg, 2007. "Das Saldenmechanische Modell von Fritz Helmedag und die Empirie," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW - Leibniz Information Centre for Economics, vol. 87(6), pages 406-412.
    3. James M. Buchanan & Yong J. Yoon, 1999. "Generalized Increasing Returns, Euler's Theorem, and Competitive Equilibrium," History of Political Economy, Duke University Press, vol. 31(3), pages 511-523, Fall.
    4. Douglas, Paul H, 1976. "The Cobb-Douglas Production Function Once Again: Its History, Its Testing, and Some New Empirical Values," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 903-915, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jesus Felipe & Franklin M. Fisher, 2003. "Aggregation in Production Functions: What Applied Economists should Know," Metroeconomica, Wiley Blackwell, vol. 54(2‐3), pages 208-262, May.
    2. Roger J. Sandilands, 2009. "Solovian and New Growth Theory from the Perspective of Allyn Young on Macroeconomic Increasing Returns," History of Political Economy, Duke University Press, vol. 41(5), pages 285-303, Supplemen.
    3. Yashin, Pete, 2014. "The Golden Rule of Capital Accumulation and Global Recession. Aggregate Production Function and the Cambridge Capital Controversy," MPRA Paper 58570, University Library of Munich, Germany.
    4. José Francisco Bellod Redondo, 2011. "La función de producción de Cobb-Douglas y la economía española," Revista de Economía Crítica, Asociación de Economía Crítica, vol. 12, pages 9-38.
    5. Nicol`o Cangiotti & Mattia Sensi, 2020. "A geometric characterization of VES and Kadiyala-type production functions," Papers 2004.09617, arXiv.org.
    6. Villar Otálora, Juan Camilo, 2021. "Una revisión sobre los métodos convencionales de la contabilidad del crecimiento: La tiranía de la identidad [A review of the conventional methods of growth accounting: The tyranny of identity]," MPRA Paper 106683, University Library of Munich, Germany.
    7. Alvaro Angeriz & John McCombie & Mark Roberts, 2008. "Returns to Scale for EU Regional Manufacturing," Working Papers 20, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    8. Ayad, Fayssal, 2023. "Mapping the path forward: A prospective model of natural resource depletion and sustainable development," Resources Policy, Elsevier, vol. 85(PA).
    9. Yashin, Pete, 2016. "Кризис И Рост Неравенства. Оптимальный Путь Экономического Роста [The crisis and increasing inequality. The best equilibrium growth path]," MPRA Paper 73544, University Library of Munich, Germany.
    10. Nadia Elena Stoicuța & Olimpiu Stoicuța, 2015. "Comparative analysis of estimation methods for CES production function," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 15(2), pages 167-180.
    11. Rosolino A. Candela, 2022. "The Division of Labor and Knowledge is Limited by the Division of Ownership Over the Ultimate Resource: The Role of Economies of Scope in Julian Simon," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(3), pages 323-341, September.
    12. Fanglin LI & Michael APPIAH & Regina Naa Amua DODOO, 2020. "The Effects Of Technology And Labor On Growth In Emerging Countries," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 12(2), pages 39-47, June.
    13. Danny García Callejas, 2005. "Economic Growth, Consumption and Oil Scarcity in Colombia: A Ramsey model, time series and panel data approach," Borradores del CIE 4180, Universidad de Antioquia, CIE.
    14. Garzarelli, Giampaolo & Limam, Yasmina Reem & Thomassen, Bjørn, 2007. "Open Source Software and Economic Growth: A Classical Division of Labor Perspective," MPRA Paper 3849, University Library of Munich, Germany.
    15. Roman G. Smirnov & Kunpeng Wang, 2019. "The Hamiltonian approach to the problem of derivation of production functions in economic growth theory," Papers 1906.11224, arXiv.org.
    16. Roman G. Smirnov & Kunpeng Wang, 2017. "In search of a new economic model determined by logistic growth," Papers 1711.02625, arXiv.org, revised Oct 2018.
    17. Alvaro Angeriz & John McCombie & Mark Roberts, 2008. "New Estimates of Returns to Scale and Spatial Spillovers for EU Regional Manufacturing, 1986—2002," International Regional Science Review, , vol. 31(1), pages 62-87, January.
    18. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    19. Das Gupta, Monica & Bongaarts, John & Cleland, John, 2011. "Population, poverty, and sustainable development : a review of the evidence," Policy Research Working Paper Series 5719, The World Bank.
    20. Kawalec Paweł, 2020. "The dynamics of theories of economic growth: An impact of Unified Growth Theory," Economics and Business Review, Sciendo, vol. 6(2), pages 19-44, June.

    More about this item

    Keywords

    production function; technical change; Cobb; Douglas; Solow; development of the German economy;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:86368. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.