IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

C.E.S. production functions in the light of the Cambridge critique

  • Schefold, Bertram
Registered author(s):

    The Cambridge debate of the 1960s showed conclusively that the aggregation of capital, so as to obtain a surrogate production function according to Samuelson, is not possible in general, with critical implications also for other variants of neoclassical theory. The framework for the demonstration is that of linear activity analysis. There is an individual wage curve in function of the rate of profit for each technique. If these individual wage curves were straight lines, their envelope would define a wage curve resulting from all techniques, from which a surrogate production function could be derived, but all wage curves are straight only, if there is only one industry. And if wage curves are not straight, phenomena such as reswitching show that essential neoclassical hypotheses need not hold. A recent empirical investigation by Han and Schefold has found one empirical example for reswitching and several for reverse capital deepening. A rigorous derivation of surrogate production functions thus is ruled out also on empirical grounds, but the paradoxes seem not to be as frequent as the critics once thought, so that the question arises whether approximate surrogate production functions could be derived, with individual wage curves which would be sufficiently linear to construct approximate surrogate production functions, indicating a relationship between the intensity of capital and output per head which would be sufficiently precise to work with. The paper is part of a wider investigation, in which conditions for the existence of quasi-linear wage curves and the possibility of the construction of approximate surrogate production functions are given. The emphasis here is on the special hypotheses needed to obtain C.E.S. production functions.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/B6X4M-4PFW64B-4/1/d46eba18004a3823d93ca1ddd5744359
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Journal of Macroeconomics.

    Volume (Year): 30 (2008)
    Issue (Month): 2 (June)
    Pages: 783-797

    as
    in new window

    Handle: RePEc:eee:jmacro:v:30:y:2008:i:2:p:783-797
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Steedman, Ian & Tomkins, Judith, 1998. "On Measuring the Deviation of Prices from Values," Cambridge Journal of Economics, Oxford University Press, vol. 22(3), pages 379-85, May.
    2. Garegnani, P, 1970. "Heterogeneous Capital, the Production Function and the Theory of Distribution," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 407-36, July.
    3. repec:cup:cbooks:9780521096720 is not listed on IDEAS
    4. Bertram Schefold, 2005. "Reswitching As A Cause Of Instability Of Intertemporal Equilibrium," Metroeconomica, Wiley Blackwell, vol. 56(4), pages 438-476, November.
    5. Jonathan Temple, 2006. "Aggregate Production Functions and Growth Economics," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(3), pages 301-317.
    6. Zonghie Han & Bertram Schefold, 2006. "An empirical investigation of paradoxes: reswitching and reverse capital deepening in capital theory," Cambridge Journal of Economics, Oxford University Press, vol. 30(5), pages 737-765, September.
    7. Garegnani, P, 1970. "Heterogeneous Capital, the Production Function and the Theory of Distribution: Reply," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 439, July.
    8. 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.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:jmacro:v:30:y:2008:i:2:p:783-797. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.