Aggregate Output, Capital, and Labor in the Post-War U.S. Economy

Artikel

New estimates of an aggregate long-term production function for the post-war U.S. economy are reported. The results indicate that this long-term aggregate production function exhibits a slight but statistically significant increasing returns to scale. Since virtually all econometric growth studies assume constant returns to scale, my finding raises serious doubts about the validity of this common practice. I also find that since the war real output has become more sensitive to changes in capital and less sensitive to changes in labor. In particular, I show that the long-run capital and labor elasticities of real output are both in the range of 0.44–0.55. Similar estimates for the capital and labor elasticities of output from earlier studies covering pre-war and the inter-war periods are 0.25 and 0.75, respectively.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economics Letters ; ISSN: 0165-1765 ; Volume: 33 ; Year: 1990 ; Issue: 1 (May) ; Pages: 41-45 ; Amsterdam: Elsevier

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: General ; Investment; Capital; Intangible Capital; Capacity ; Macroeconomics: Production ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Aggregate Factor Income Distribution ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General ; Economic Growth and Aggregate Productivity: General ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ; Economywide Country Studies: U.S.; Canada
• Subject: Aggregate Production Function ; Cobb-Douglas Production Function ; Returns to Scale ; Long-Term ; Increasing Returns to Scale ; LR Capital Elasticity of Output ; LR Labor Elasticity of Output ; Estimates of Technical Progress

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Levy, Daniel
• Event: Veröffentlichung
• (who): Elsevier ; ZBW – Leibniz Information Centre for Economics
• (where): Amsterdam
• (when): 1990

Further information

• DOI: doi:10.1016/0165-1765(90)90198-A
• Handle: http://hdl.handle.net/10419/206708
• Last update: 10.03.2025, 11:43 AM CET