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Braaaaaaaains! The Undead Humbug Production Function: Now With Human Capital

Author

Listed:
  • Mike Isaacson

    (Department of Economics, New School for Social Research)

Abstract

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 profit 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.

Suggested Citation

  • Mike Isaacson, 2015. "Braaaaaaaains! The Undead Humbug Production Function: Now With Human Capital," Working Papers 1513, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:1513
    as

    Download full text from publisher

    File URL: http://www.economicpolicyresearch.org/econ/2015/NSSR_WP_132015.pdf
    File Function: First version, 2015
    Download Restriction: no
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. BRAAAAAAAAINS!!!!
      by Mike Isaacson in Vulgar Economics on 2015-07-12 18:00:00
    2. Neoclassical Production Function Reader
      by Mike Isaacson in Vulgar Economics on 2015-07-27 19:00:00

    More about this item

    Keywords

    Capital; development accounting; human capital; methodology;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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