What I take exception to in Earl Brubaker's comments is not so much what he says as how he says it. If he were to have phrased things a little more moderately I might almost have agreed with some of the things he said. But the tone of finality about a subject which hardly lends itself to final judgements of that sort may give his remarks an undeserved impression of substance which ought to be removed. Those parts of Brubaker's comments which touch upon difficulties of aggregation, inaccurate measurenment of "true" inputs, etc., are really universal complaints about using aggregate data that we have heard many times before. I fully and unconditionally agree that they throw up serious obstacles to the measurement, interpretation, and application of aggregate production functions. I thought that this attitude was spelled out clearly enough in my paper. But what else can you do? If y ou want to get an overall picture you've got to use aggregate statistics and aggregative models, flawed as they may be in theory or practice. As Robert Solow has quipped, "It may be crooked, but it's the only wheel in town." Brubaker has not inhibited himself from being a heavy consumer of highly aggregated numbers in order to talk about and interpret overall Soviet performance. And who can fault him for that? But isn't it then a little unfair for him to make such an issue about this very point in criticizing someone else's work? Then there is the old bugaboo about "Soviet Statistics." According to Brubaker "one can only ponder in awe how these difficulties (of production function estimation) may be compounded where the data have their underlying basis in the Soviet statistical and economic systems." This strikes me as an unwarranted exageration. There are some added real problems associated with (today's) Soviet statistics, as I indicated in the Data Appendix to my paper. But there may also be areas of equal weight in which their statistics are more accurate and comprehensive than ours (not any worse would really be a more apt description). For example, in compiling capital stock estimates, as I indicated in my paper, the Soviet Central Statistical Institute has access to such data as the value of unfinished construction, the value of capital retirements, and value of capital stock as ascertained by periodic inventories. None of these are available for the United States. The lack of unemployment in the USSR, as I also pointed out, eliminates what is one of the major headaches for production function estimation in the West. I certainly don't want to be driven into claiming any more for the Soviet data I used than that to a first approximation they are no more unfit for direct production function estimation than U.S. data (this is really damning by faint praise!). Brubaker doesn't like the fact that the imputed factor shares based on the parameter point estimates don't correspond closely enough to Western empirical factor shares. Now it's one order of magnitude to sin against economic theory (as I have) by postulating an aggregate production function and setting about measuring it. It's yet another level of sin to invoke a marginal productivity theory of distribution on one big production function and then identify factor shares with parameter values, especially for the USSR. What's more, there's nothing sacred about the derived parameter point estimates-I certainly wouldn't be willing to go to the stake for them. If my moclel has any relation to reality it has to be a very rough one. While the statistical tests performed seemed to in* Associate professor of economics, Yale University.

Soviet postwar economic growth and capital-labor substitution

the estimation of various forms of the production function and because of the use of different data sets. Predictions of future growth based on these calculations have varied significantly, but generally have implied continued decreasing growth of the economy. The interpretation is that there are system-determined technological constraints in the Soviet economy causing the slowdown in growth and that these constraints are identifiable through the parameters of an aggregate production function. The finding of diminishing returns to capital is linked to the belief that existing and future deployments of capital cannot be improved, and the decreasing rate of factor productivity growth is attributed to microeconomic barriers to the introduction and diffusion of new technology and to expectations about future trends in technical and economic inefficiency. The validity of these inferences has not been systematically tested, although

The Influence of Central Planning on the Economic Slowdown in the Soviet Union and Eastern Europe: A Comparative Production Function Analysis

Slowdown in Soviet industrial growth: 1947–1975 reconsidered☆

Economic growth in the USSR, Hungary, and East and West Germany

The monograph deals with analysis of the factors that determine the diversity in the degree and pace of economic development of Russia's regions. In particular, basing on the data of main socio economic indicators of RF constituent regions' performance, the authors have empirically tested various convergence concepts and attempted to conduct decomposition of economic growth and assess the dynamics of labor productivity in Russia's regions. One of the sections of the monograph focuses on the Canadian record of development of individual regions and equalization policies. The monograph contains conclusions and recommendations for development of the federal economic policy with respect to different Russian regions.

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Factors of Economic Growth in Russia's Regions

One of the most fascinating aspects of Soviet economic development has been the remarkable pace in growth of aggregate output maintained over the substantial period of more than three decades. The pace has been remarkable, though not completely unprecedented, and there need be little doubt about its authenticity. Thanks largely to Professors Abram Bergson, Warren Eason, and Raymond Powell, to Dr. Richard Moorsteen, and to Nancy Nimitz there exists a carefully prepared and consistent record of Soviet Russia's gross national product, capital stock, and labor inputs for the period 1928 through 1961 [4] [13]. In table 1 a portion of this basic record on Soviet economic development is reproduced. The primary purpose of this paper is to explore the usefulness of the hypothesis of embodied technical change for providing insight into sources of the growth in output. II Alternative Aggregate Production Functions and Soviet Growth

Embodied Technology, the Asymptotic Behavior of Capital's Age, and Soviet Growth

In studies of factor productivity in the Soviet economy, as in many other economic investigations, it has been necessary to make some assumption about the degree to which capital and labor are substitutable for each other. In many, if not most, the investigators have implicitly, and often explicitly, assumed either unitary elasticity of factor substitution, i.e., the renowned Cobb-Douglas function, or infinite elasticity of substitution, the arithmetic function [2-5] [7] [10] [12] [13]. Recent analyses of the American and other economies [1] [6] [8] [9] suggest, however, that a numerical value less than one, perhaps on the order of 0.5, may be more nearly consistent with the statistical evidence. Since the elasticity of substitution may be regarded as an index of diminishing returns, and since inputs of capital and labor have been growing at highly disparate, perhaps unprecedentedly disparate, rates in the USSR, it is of particular interest to ask if the traditional assumptions are indeed suitable. Would a closer approximation to the "truth" be given by the estimates for other countries? In the current state of our knowledge on the Soviet Union can we shed any light on the appropriate value for the elasticity of substitution? If it could very well have been less than unity, as in fact our calculations suggest, what are the implications for quantitative estimates of the sources of Soviet growth? Recently published data on capital and labor inputs and on "synthetic" factor shares in income [2] [10] have made it possible to suggest some tentative answers to these questions, which is the purpose of this paper. We shall proceed as follows. In section II we analyze data on growth of labor and capital and on "synthetic" factor shares to obtain a range of implied values for the elasticity of substitution. In section III we use these values to obtain further implications, those pertaining to the part of growth in output explained by combined input of capital and labor and the part left to be explained by other factors. II Factor Inputs, Synthetic Factor Shares, and the Elasticity of Substitution

Earl R. Brubaker

Papers

Embodied Technology, the Asymptotic Behavior of Capital's Age, and Soviet Growth

Synthetic Factor Shares, The Elasticity of Substitution, and the Residual in Soviet Growth