The first step in understanding international income differences is measuring supplies of various factors of production and their productivity. Recent work suggests that these calculations should treat workers of different skill levels as imperfect substitutes. However, under this approach, it...

Purpose An aggregate production function has been used in macroeconomic analysis for a long time, even though it seems that it is conceptually confusing and problematic. The purpose of this paper is to argue that the measurement problem related to the heterogenous capital input that exists in...