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Putty-Clay Capital and an Index of Capital per Hour: Working Paper 2005-08

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  • Mark Lasky

Abstract

This paper presents an index of capital per hour constructed using the assumption of putty-clay capital. That index is based on an aggregate putty-clay production function that both preserves the desirable empirical properties of putty-clay models and yields a closed-form solution for aggregate investment as a function of aggregate variables. The key to the production function is an index of capital per hour that is a logarithmic average of the ratios of capital to labor embodied in each unit of capital. That index separates out the capital-deepening portion of investment (

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  • Mark Lasky, 2005. "Putty-Clay Capital and an Index of Capital per Hour: Working Paper 2005-08," Working Papers 16575, Congressional Budget Office.
    • Handle: RePEc:cbo:wpaper:16575
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