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Aggregate Production Functions and Neoclassical Properties: An Empirical Verification

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  • Stefano Zambelli

Abstract

Standard postulates concerning the aggregate production function are about marginal productivities - and the associated demand of labor and capital – which are to be negatively related to factor prices, namely the wage rate and the profit rate. The theoretical cases in which these neoclassical properties do not hold are regarded as anomalies. We compute the aggregate values for capital, production and labour and find that the neoclassical postulates do not hold for the whole dataset under consideration.

Suggested Citation

  • Stefano Zambelli, 2014. "Aggregate Production Functions and Neoclassical Properties: An Empirical Verification," ASSRU Discussion Papers 1405, ASSRU - Algorithmic Social Science Research Unit.
    • Handle: RePEc:trn:utwpas:1405
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    References listed on IDEAS

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    1. Stefano Zambelli, 2004. "The 40% neoclassical aggregate theory of production," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(1), pages 99-120, January.
    2. Fisher, Franklin M, 1969. "The Existence of Aggregate Production Functions," Econometrica, Econometric Society, vol. 37(4), pages 553-577, October.
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    Cited by:

    1. Schefold, Bertram, 2016. "Marx, the Production Function and the Old Neoclassical Equilibrium: Workable under the Same Assumptions? With an Appendix on the Likelihood of Reswitching and of Wicksell Effects," Centro Sraffa Working Papers CSWP19, Centro di Ricerche e Documentazione "Piero Sraffa".

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    More about this item

    Keywords

    Aggregate Neoclassical Production Function; Cobb-Douglas; CES; Technological Change; Macroeconomics; Growth.;
    All these keywords.

    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, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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