IDEAS home Printed from https://ideas.repec.org/p/trn/utwpas/1405.html
   My bibliography  Save this paper

Aggregate Production Functions and Neoclassical Properties: An Empirical Verification

Author

Listed:
  • Stefano Zambelli

Abstract

Standard postulates concerning the aggregate production function are about marginal productivities - and the associated demand of labor and capital – which are to be negatively related to factor prices, namely the wage rate and the profit rate. The theoretical cases in which these neoclassical properties do not hold are regarded as anomalies. We compute the aggregate values for capital, production and labour and find that the neoclassical postulates do not hold for the whole dataset under consideration.

Suggested Citation

  • Stefano Zambelli, 2014. "Aggregate Production Functions and Neoclassical Properties: An Empirical Verification," ASSRU Discussion Papers 1405, ASSRU - Algorithmic Social Science Research Unit.
    • Handle: RePEc:trn:utwpas:1405
    as

    Download full text from publisher

    File URL: http://www.assru.economia.unitn.it/files/DP_5_2014_I.pdf
    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. Stefano Zambelli, 2004. "The 40% neoclassical aggregate theory of production," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(1), pages 99-120, January.
    3. Zambelli, Stefano & Fredholm, Thomas & Venkatachalam, Ragupathy, 2017. "Robust measurement of national technological progress," Structural Change and Economic Dynamics, Elsevier, vol. 42(C), pages 38-55.
    4. Robert M. Solow, 1955. "The Production function and the Theory of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(2), pages 101-108.
    5. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    6. Robert M. Solow, 1962. "Substitution and Fixed Proportions in the Theory of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(3), pages 207-218.
    7. Paul A. Samuelson, 1966. "A Summing Up," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(4), pages 568-583.
    8. Marcel Timmer & Abdul A. Erumban & Reitze Gouma & Bart Los & Umed Temurshoev & Gaaitzen J. de Vries & I–aki Arto & Valeria Andreoni AurŽlien Genty & Frederik Neuwahl & JosŽ M. Rueda?Cantuche & Joseph , 2012. "The World Input-Output Database (WIOD): Contents, Sources and Methods," IIDE Discussion Papers 20120401, Institue for International and Development Economics.
    9. repec:bla:scandj:v:81:y:1979:i:4:p:459-74 is not listed on IDEAS
    10. Kazuo Sato, 1974. "The Neoclassical Postulate and the Technology Frontier in Capital Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(3), pages 353-384.
    11. Shaikh, Anwar, 1974. "Laws of Production and Laws of Algebra: The Humbug Production Function," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 115-120, February.
    12. Pierangelo Garegnani, 2024. "Switching of Techniques," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 195-208, Springer.
    13. Fisher, Franklin M, 1969. "The Existence of Aggregate Production Functions," Econometrica, Econometric Society, vol. 37(4), pages 553-577, October.
    14. Herbert A. Simon & Ferdinand K. Levy, 1963. "A Note on the Cobb-Douglas Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(2), pages 93-94.
    15. Paul A. Samuelson, 1962. "Parable and Realism in Capital Theory: The Surrogate Production Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(3), pages 193-206.
    16. Scott Carter, 2011. "C.E. Ferguson and the Neoclassical Theory of Capital: A Matter of Faith," Review of Political Economy, Taylor & Francis Journals, vol. 23(3), pages 339-356.
    17. Michael Bruno & Edwin Burmeister & Eytan Sheshinski, 1966. "The Nature and Implications of the Reswitching of Techniques," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(4), pages 526-553.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Schefold, Bertram, 2016. "Marx, the Production Function and the Old Neoclassical Equilibrium: Workable under the Same Assumptions? With an Appendix on the Likelihood of Reswitching and of Wicksell Effects," Centro Sraffa Working Papers CSWP19, Centro di Ricerche e Documentazione "Piero Sraffa".

    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. Zambelli, Stefano & Fredholm, Thomas & Venkatachalam, Ragupathy, 2017. "Robust measurement of national technological progress," Structural Change and Economic Dynamics, Elsevier, vol. 42(C), pages 38-55.
    2. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
    3. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
    4. J. Barkley Rosser, 2020. "Austrian themes and the Cambridge capital theory controversies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(4), pages 415-431, December.
    5. Kurose, Kazuhiro & Yoshihara, Naoki, 2016. "The Heckscher-Ohlin-Samuelson Model and the Cambridge Capital Controversies," UMASS Amherst Economics Working Papers 2016-05, University of Massachusetts Amherst, Department of Economics.
    6. Carlo Milana, 2019. "Solving the Reswitching Paradox in the Sraffian Theory of Capital," Applied Economics and Finance, Redfame publishing, vol. 6(6), pages 97-125, November.
    7. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.
    8. Bitros, George C., 2009. "The Theorem of Proportionality in Mainstream Capital Theory: An Assessment of its Conceptual Foundations," MPRA Paper 17436, University Library of Munich, Germany.
    9. Stefano Zambelli, 2018. "Production of commodities by means of commodities and non‐uniform rates of profits," Metroeconomica, Wiley Blackwell, vol. 69(4), pages 791-819, November.
    10. George Bitros, 2010. "The theorem of proportionality in contemporary capital theory: An assessment of its conceptual foundations," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(4), pages 367-401, December.
    11. Garbellini, Nadia, 2020. "Measurement without theory, and theory without measurement: What's wrong with Piketty's capital in the XXI century?," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 50-62.
    12. Avi J. Cohen, 2003. "Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 199-214, Winter.
    13. Carlo Milana, 2024. "Refuting Samuelson’s capitulation on the re-switching of techniques in the Cambridge capital controversy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 37(2), pages 179-197, June.
    14. Nadia Garbellini, 2018. "Inequality in the 21st Century:A Critical Analysis of Piketty`s Work," Working Papers Series 69, Institute for New Economic Thinking.
    15. Kazuhiro Kurose & Naoki Yoshihara, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Working Papers SDES-2018-17, Kochi University of Technology, School of Economics and Management, revised Nov 2018.
    16. Gregory Casey, 2018. "Technology-Driven Unemployment," 2018 Meeting Papers 302, Society for Economic Dynamics.
    17. Jesus Felipe & F. Gerard Adams, 2005. ""A Theory of Production" The Estimation of the Cobb-Douglas Function: A Retrospective View," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 427-445, Summer.
    18. Fix, Blair, 2015. "Putting Power Back Into Growth Theory," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(2), pages 1-37.
    19. Eric Kemp-Benedict & Crystal Drakes & Timothy J. Laing, 2018. "Export-Led Growth, Global Integration, and the External Balance of Small Island Developing States," Economies, MDPI, vol. 6(2), pages 1-25, June.
    20. Mellár, Tamás, 2018. "Jövedelmi és termelési elszámolás makrogazdasági megközelítésben [Income and production calculations in a macro approach]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 810-830.

    More about this item

    Keywords

    Aggregate Neoclassical Production Function; Cobb-Douglas; CES; Technological Change; Macroeconomics; Growth.;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    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:trn:utwpas:1405. 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: assru.tm@gmail.com (email available below). General contact details of provider: https://edirc.repec.org/data/detreit.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.