Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/47348 
Year of Publication: 
2008
Series/Report no.: 
Memorandum No. 2008,27
Publisher: 
University of Oslo, Department of Economics, Oslo
Abstract: 
A dynamic analysis of structural change is reviewed based on a vintage model of substitutability between inputs including capital before investment, but no substitution possibilities after investment, and ex post production possibilities characterised by fixed input coefficients. Key elements in understanding structural change are the entering of capacity embodying new technology and exiting of capacity no longer able to yield positive quasi-rent. Three production function concepts are identified: the ex ante micro unit production function as relevant when investing in new capacity, the ex post micro production function, and the short-run industry production function giving the production possibilities at the industry level. Productivity measurement, taking these types of production functions into consideration, leads to different interpretations of productivity change than traditional approaches not being clear about which production function concept is used.
Subjects: 
Structural change
productivity measurement
putty-clay
ex ante production function
short-run industry production function
JEL: 
C43
D24
L61
Document Type: 
Working Paper

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