Braaaaaaaains! The Undead Humbug Production Function: Now With Human Capital
This paper demonstrates that the human-capital augmented Cobb-Douglas function is identically equal to the rules of aggregate accounting with any factor indices and an arbi- trary `human capital' variable thrown in. It is demonstrated empirically that the term for `total factor productivity' does not show total factor productivity at all, but rather a factor share weighted geometric mean of the prot rate and the quotient of the wage rate and human capital. It is demonstrated empirically with randomly generated data that both the calculation of this term as well as tests of its explanatory power in development economics are the result of using an arbitrary variable correlative with wages. It is also a story about zombies.
|Date of creation:||Jun 2015|
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