Arbeitspapier

Problems with regional production functions and estimates of agglomeration economies: A caveat emptor for regional scientists

Over the last 20 years or so, mainstream economists have become more interested in spatial economics and have introduced largely neoclassical economic concepts and tools to explain phenomena that were previously the preserve of economic geographers. One of these concepts is the aggregate production function, which is also central to much of regional growth theory. However, as Franklin Fisher, inter alios, has shown, the conditions necessary to aggregate microproduction functions into an aggregate production function are so stringent that in all probability the aggregate production function does not exist. This paper shows that the good statistical fits commonly found empirically are solely due to the use of value data and an underlying accounting identity. The result is that the estimates obtained cannot be regarded as providing evidence of the underlying technological structure of the spatial economy, including the aggregate elasticity of substitution, the degree of returns to scale, and the rate of technical progress.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 725

Klassifikation
Wirtschaft
Current Heterodox Approaches: General
Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
Thema
Accounting Identity
Agglomeration Economies
Regional Aggregate Production Functions

Ereignis
Geistige Schöpfung
(wer)
Felipe, Jesus
McCombie, John
Ereignis
Veröffentlichung
(wer)
Levy Economics Institute of Bard College
(wo)
Annandale-on-Hudson, NY
(wann)
2012

Handle
Letzte Aktualisierung
20.09.2024, 08:23 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Felipe, Jesus
  • McCombie, John
  • Levy Economics Institute of Bard College

Entstanden

  • 2012

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