Production Functions Behaving Badly - Reconsidering Fisher and Shaikh
AbstractWe reconsider Anwar Shaikh’s critique of the neoclassical theory of growth and distribution based on its use of aggregate production functions. This is done by reconstructing and extending Franklin M. Fisher’s 1971 computer simulations, which Shaikh used to support his critique. Together with other recent extensions to Shaikh’s seminal work, the results support and strengthen the evidence against the use of neoclassical aggregate production functions.
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Bibliographic InfoPaper provided by ASSRU - Algorithmic Social Science Research Unit in its series ASSRU Discussion Papers with number 1305.
Date of creation: 2013
Date of revision:
HUMBUG Production Function; Cobb-Douglas Production Function; Aggregation; Computational Techniques.;
Find related papers by 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, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- 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 115-20, February.
- Jesus Felipe & Carsten Holz, 2001. "Why do Aggregate Production Functions Work? Fisher's simulations, Shaikh's identity and some new results," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(3), pages 261-285.
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"The 40% Neoclassical Aggregate Theory of Production,"
Computing in Economics and Finance 2001
42, Society for Computational Economics.
- Stefano Zambelli, 2004. "The 40% neoclassical aggregate theory of production," Cambridge Journal of Economics, Oxford University Press, vol. 28(1), pages 99-120, January.
- Anwar Shaikh, 2005. "Nonlinear Dynamics and Pseudo-Production Functions," Eastern Economic Journal, Eastern Economic Association, vol. 31(3), pages 447-466, Summer.
- 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, 05.
- Jesus Felipe & J. S. L. McCombie, 2001. "The CES Production Function, the accounting identity, and Occam's razor," Applied Economics, Taylor & Francis Journals, vol. 33(10), pages 1221-1232.
- Fisher, Franklin M, 1971. "Aggregate Production Functions and the Explanation of Wages: A Simulation Experiment," The Review of Economics and Statistics, MIT Press, vol. 53(4), pages 305-25, November.
- 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.
- Fisher, Franklin M, 1969. "The Existence of Aggregate Production Functions," Econometrica, Econometric Society, vol. 37(4), pages 553-77, October.
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