Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

A Cross-Country Empirical Investigation of the Aggregate Production Function Specification

A Cross-Country Empirical Investigation of the Aggregate Production Function Specification Many growth models assume that aggregate output is generated by a Cobb-Douglas production function. In this article we question the empirical relevance of this specification. We use a panel of 82 countries over a 28-year period to estimate a general constant-elasticity-of-substitution (CES) production function specification. We find that for the entire sample of countries we can reject the Cobb-Douglas specification. When we divide our sample of countries up into several subsamples, we find that physical capital and human capital adjusted labor are more substitutable in the richest group of countries and are less substitutable in the poorest group of countries than would be implied by a Cobb-Douglas specification. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Growth Springer Journals

A Cross-Country Empirical Investigation of the Aggregate Production Function Specification

Loading next page...
 
/lp/springer-journals/a-cross-country-empirical-investigation-of-the-aggregate-production-YjamTmAA0F

References (69)

Publisher
Springer Journals
Copyright
Copyright © 2000 by Kluwer Academic Publishers
Subject
Economics; Economic Growth; Macroeconomics/Monetary Economics//Financial Economics; International Economics
ISSN
1381-4338
eISSN
1573-7020
DOI
10.1023/A:1009830421147
Publisher site
See Article on Publisher Site

Abstract

Many growth models assume that aggregate output is generated by a Cobb-Douglas production function. In this article we question the empirical relevance of this specification. We use a panel of 82 countries over a 28-year period to estimate a general constant-elasticity-of-substitution (CES) production function specification. We find that for the entire sample of countries we can reject the Cobb-Douglas specification. When we divide our sample of countries up into several subsamples, we find that physical capital and human capital adjusted labor are more substitutable in the richest group of countries and are less substitutable in the poorest group of countries than would be implied by a Cobb-Douglas specification.

Journal

Journal of Economic GrowthSpringer Journals

Published: Oct 6, 2004

There are no references for this article.