Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/52688 
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dc.contributor.authorGracia, Eduarden
dc.date.accessioned2011-12-08-
dc.date.accessioned2011-12-09T12:33:54Z-
dc.date.available2011-12-09T12:33:54Z-
dc.date.issued2011-
dc.identifier.citation|aEconomics: The Open-Access, Open-Assessment E-Journal|c1864-6042|v5|h2011-19|nKiel Institute for the World Economy (IfW)|lKiel|y2011|p1-50en
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2011-19en
dc.identifier.urihttp://hdl.handle.net/10419/52688-
dc.description.abstractThe 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 addressing those theoretical drawbacks and providing a better empirical fit than the CobbDouglas formula. The new model, unlike the CobbDouglas function, does not portray installed capacity as aggregate capital but as a sunk cost generating economic rents. An analysis of 1949-2008 annual U.S. growth data suggest this alternative model explains nearly 85 percent of GDP fluctuations and is empirically more robust than the CobbDouglas, whilst both contemporary and lagged aggregate capital are statistically rejected as explanatory variables. This lends support to the old Cambridge Critique”, according to which using value-weighted capital aggregates to explain production simply makes no sense. At face value, these results not only pose a question on any macroeconomic model assuming a CobbDouglas function but also point towards an alternative interpretation of phenomena such as the way monetary policy impacts productivity.en
dc.language.isoengen
dc.publisher|aKiel Institute for the World Economy (IfW) |cKielen
dc.subject.jelE22en
dc.subject.jelE23en
dc.subject.ddc330en
dc.subject.keywordproduction functionen
dc.subject.keywordCobbDouglasen
dc.subject.keywordcapital controversyen
dc.subject.stwProduktionsfunktionen
dc.subject.stwMikroökonomische Fundierungen
dc.subject.stwCobb-Douglas-Produktionsfunktionen
dc.subject.stwKapitaltheorieen
dc.subject.stwSchätzungen
dc.subject.stwSozialprodukten
dc.subject.stwUSAen
dc.titleUncertainty and capacity constraints: Reconsidering the aggregate production function-
dc.typeArticleen
dc.identifier.ppn679412980en
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.enen
dc.identifier.repecRePEc:zbw:ifweej:201119en
econstor.citation.journaltitleEconomics: The Open-Access, Open-Assessment E-Journalen
econstor.citation.issn1864-6042en
econstor.citation.volume5en
econstor.citation.issue2011-19en
econstor.citation.publisherKiel Institute for the World Economy (IfW)en
econstor.citation.publisherplaceKielen
econstor.citation.year2011en
econstor.citation.startpage1en
econstor.citation.endpage50en

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