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The johansen schema; An integrated system of production: comments and criticisms; The ex ante function; The ex ante function and the ex post micro function; Aggregate putty-clay functions; Agtregate neoclassical production functions; Neoclassical production functions: fact or fantasy? Production functions - some conclusions.
Models that employ the normalized aggregate production function have primarily focused on explaining the importance of the elasticity of substitution, between factors for production, for exogenous and constant savings decisions. The balance growth path for these models are invariant to the level of the elasticity of substitution. Thus, Relaxing the assumption of constant savings for capitals, I employ a neoclassical growth model with endogenous consumption and saving decisions to examine the effects of the level of the elasticity of substitution on the balance growth rate and speed of converge. I find that the effects of the elasticity of substitution on the aforementioned depend upon the initial levels of the factors of production.
This text provides a new approach to the subject, including a comprehensive survey of novel theoretical approaches, methods, and models used in macroeconomics and macroeconometrics. The book gives extensive insight into economic policy, incorporates a strong international perspective, and offers a broad historical perspective.
The present study introduces the Par Production Technology. The CES and Par Production Technologies differ most in the following feature. In CES Technology the ratio of the income shares is not limited and the shares vary from 0 to 1 or vice versa depending on the ratio of (the two) inputs. In Par Technology the ratio of the income shares is finite and the limits are controlled by the distribution limit parameter(s). Both technologies supply a different system for the optimisation as they demand separate forms for the icome share equations. The Impossibility Theorem, proved by Uzawa (1968), implies that the CES production function can not be generalised on n (n>2) variables with arbitrary values of the partial elasticities. It could be inferred, that the relative income shares should have limited areas which are more narrow than between 0 and 1 in case the number of input variables is bigger than 2. The Par production function described here can be used in theoretical and empirical work both in the basic nonlinear and the linearised forms.