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DIE STAATSAUSGABEN IN DER MAKROÖKONOMISCHEN PRODUKTIONSFUNKTION *
Author(s) -
Wittmann Walter
Publication year - 1969
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1969.tb02534.x
Subject(s) - economics , stock (firearms) , production function , factors of production , production (economics) , capital (architecture) , econometrics , fixed capital , order (exchange) , macroeconomics , microeconomics , capital formation , financial capital , finance , profit (economics) , engineering , mechanical engineering , history , archaeology
SUMMARY In this article the author introduces the government investments into a modified Cobb‐Douglas production function. These government investments and the corresponding outlays of the private sector of the economy are divided into a public capital stock and a tertiary capital stock (the immaterial capital). These stocks are introduced into the production function in addition to labor and the private capital stock. Then the different time‐lags between the income‐effect and the capacity‐effect are considered. In order to cope with the problems arising from the use of an analysis of regression, empirical investigations generally use the production function in the linearized form, for which the rates of increases are calculated. At the same time the problem of how to find realistic statistical weights (elasticities of production) arises for the new explaining variables. The author proposes two methods and calculates one (hypothetical) example. Following is a discussion of some empirical problems (time‐lags, estimations of the capital‐stock, elimination of fluctuations in the use of capacity, etc.). The results suggest strongly that the introduction of government investments into the macro‐economic production function is useful tool to reduce the residual factor F .