In classical and Marxian political economy economic advancement takes place in stages of development. These stages are characterized by different functional distributions of income. In this paper we show that the Cobb-Douglas Production Function is the only production function which has the...

The Cobb-Douglas function is today one of the most widely-adopted assumptions in economic modeling, yet both its theoretical and empirical basis have long been under question. The purpose of this paper is to build an alternative production function on neoclassical microfoundations to address...

The CobbDouglas function is today one of the most widely adopted assumptions in economic modeling, yet both its theoretical and empirical bases have long been under question. This paper builds an alternative function on very different (albeit also neoclassical) microfoundations aimed at both...

We show that the large elasticity of substitution between capital and labor estimated in the literature on average, 0.9, can be explained by three factors: publication bias, use of aggregated data, and omission of the first-order condition for capital. The mean elasticity conditional on the...

We show that the large elasticity of substitution between capital and labor estimated in the literature on average, 0.9, can be explained by three factors: publication bias, use of aggregated data, and omission of the first-order condition for capital. The mean elasticity conditional on the...

We show that the large elasticity of substitution between capital and labor estimated in the literature on average, 0.9, can be explained by three factors: publication bias, use of aggregated data, and omission of the first-order condition for capital. The mean elasticity conditional on the...

It is well known that, in continuous time, the Cobb-Douglas function can be derived from the underlying, data governing, accounting identity under some reasonable assumptions (factor shares are constant, and the weighted growth of the labour input price and the capital input price is constant)....

This paper poses the hypothesis that GDP fluctuations are better modeled by regarding capital as a “sunk cost”, whose returns constitute economic rents, than as a variable input whose price equals marginal cost, as in the basic Cobb-Douglas function. The rationale is that investments require...

In this paper, we present a three equation supply-side model based on aggregation across sectors with sector specific mark-ups and the technology parameters of the production function. The model has been applied to euro area data from the 1970s assuming that the underlying production function is...

A growth accounting exercise is conducted for 88 countries for 1960-94 to examine the source of cross-country differences in total factor productivity (TFP) levels. Two differences distinguish this analysis from that of the related literature. First, the critical technology parameter-the share...