Testing the neo-classical and the Newtonian theory of production
We search for regularities observed in the production of goods by studying Finnish data. Despite the heterogeneity of sectoral growth rates in Finland, unit root is observed in annual productions in all main sectors and all manufacturing industries. Thus a linear time trend exists in annual flows of production. This is inconsistent with the static neo-classical theory that assumes firms to produce at their equilibrium flow of production. A different framework is thus needed for modeling the behavior of firms. We test a Newtonian type of model for production against the neo-classical one, and our observation is that the former works better with annual data at every manufacturing industry in Finland.
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.
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.
Volume (Year): 391 (2012)
Issue (Month): 24 ()
|Contact details of provider:|| Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/|
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.:
- George W. Stadler, 1994. "Real Business Cycles," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1750-1783, December.
- Frank Smets & Rafael Wouters, 2007.
"Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach,"
American Economic Review,
American Economic Association, vol. 97(3), pages 586-606, June.
- Frank Smets & Raf Wouters, 2007. "Shocks and Frictions in US Business Cycles : a Bayesian DSGE Approach," Working Paper Research 109, National Bank of Belgium.
- Smets, Frank & Wouters, Rafael, 2007. "Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach," CEPR Discussion Papers 6112, C.E.P.R. Discussion Papers.
- Smets, Frank & Wouters, Raf, 2007. "Shocks and frictions in US business cycles: a Bayesian DSGE approach," Working Paper Series 722, European Central Bank.
- Alan Kirman, 2010. "The Economic Crisis is a Crisis for Economic Theory ," CESifo Economic Studies, CESifo, vol. 56(4), pages 498-535, December.
- L. A. N. Amaral & S. V. Buldyrev & S. Havlin & H. Leschhorn & P. Maass & M. A. Salinger & H. E. Stanley & M. H. R. Stanley, 1997. "Scaling behavior in economics: I. Empirical results for company growth," Papers cond-mat/9702082, arXiv.org.
- Jesus Felipe, 1998. "Does the aggregate production function imply anything about the laws of production? A comment," Applied Economics Letters, Taylor & Francis Journals, vol. 5(9), pages 543-547.
- Jesus Felipe & Rana Hasan & J. S. L. McCombie, 2008. "Correcting for biases when estimating production functions: an illusion of the laws of algebra?," Cambridge Journal of Economics, Oxford University Press, vol. 32(3), pages 441-459, May.
- Jesus Felipe & Rana Hasan & J. S. L. McCombie, 2004. "Correcting For Biases When Estimating Production Functions: An Illusion Of The Laws Of Algebra?," CAMA Working Papers 2004-13, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- 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. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:phsmap:v:391:y:2012:i:24:p:6519-6527. 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: (Dana Niculescu)
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.