Capital-labor substitution and economic efficiency
TL;DR: In this article, the authors proposed a method to improve the quality of the service provided by the service provider by using the information of the user's interaction with the provider and the provider.
Abstract: Обсуждаются следующие темы: чистая теория производства, функциональное распределение дохода, технический прогресс, источники международных конкурентных преимуществ. Анализируются эластичность замещения между трудом и капиталом в обрабатывающей промышленности; производственные функции различного типа.
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01 Jan 2006
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TL;DR: In this article, the authors show that the observed disparateness of production choices among different firms can actually be attributed to the stochastic nature of the decision environment, and they provide a simple parametric functional form to represent the state-contingent technology.
Abstract: In this paper, we model production technology in a state-contingent framework. We assume that all the firms use the same stochastic technology, but they may have different risk attitudes and information sets, and ex post they may operate in different production environments. Firms maximise ex ante their preference function subject to a stochastic technology constraint; in other words, they are assumed to act rationally, thereby leaving no room for either technical or allocative inefficiency. We provide a simple parametric functional form to represent the state-contingent technology. Using simple numerical examples, we illustrate how optimal input–output choices are dramatically affected when firms have different preferences and information sets. Thus, we show that the observed disparateness of production choices among different firms can actually be attributed to the stochastic nature of the decision environment. There are two approaches to tackle the problem of production under uncertainty. The first of these is based on state-preference theory which can be traced to the work of Arrow (1953) and Debreu (1952). The second approach is based on stochastic production functions. The seminal analysis of the latter approach was put forward by Sandmo (1971) and Just and Pope (1978). ‡ Arrow and Debreu realised that uncertainty could be modelled in the same way as multi-output technology. Their argument was that if uncertainty is represented by a set of possible future states of nature, then the uncertain output vectors containing state-contingent commodities are equivalent to multioutput technology. This means that uncertainty does not affect the necessary and sufficient conditions for existence and optimality of equilibrium. But uncertainty significantly reduces the empirical reasonability of the relevant necessary and sufficient conditions. This is because it would be normal to expect markets to exist for each of the commodities in the absence of uncertainty, but on the other hand it would be too optimistic to believe that markets would exist for each commodity in every possible state of nature.
7 citations
Cites background from "Capital-labor substitution and econ..."
...…is given by x ¼ ða1z1b þ a2z2bÞc=b ð1Þ where b is a transformation of elasticity of substitution and is referred to as the substitution parameter (see Arrow et al., 1961), the parameter c represents economy of scale and zs is the amount of stochastic output produced in the state of nature…...
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01 Jun 2009
7 citations
Cites background from "Capital-labor substitution and econ..."
...Another function specification is constant elasticity of substitution (CES) function as illustrated in Equation ( 4.15 ) (Arrow et al., 1961)....
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Posted Content•
TL;DR: In this article, the authors presented a framework for possibly the most accurate measurement of the efficiency of the restructuring process in the metallurgical sector, which is based on power regression Cobb-Douglas function with its developments.
Abstract: Between 2000 and 2015, the Polish metallurgical sector was subject to serious restructuring. Presented research aimed at providing a framework for possibly most accurate measurement of efficiency of this process. The study employed: (I) Quantitative research for elaboration of production function models: power regression Cobb-Douglas function with its developments; (II) Qualitative research: Analytic Hierarchy Process for assessment of relevance of efficiency evaluation criteria in reference to various production function models in metallurgy sector: (i) sectoral added value (net production); (ii) production sold; and, (iii) steel production volume. Criteria relevance has been assessed by scientists and practitioners with specialization in metallurgy. As a result the sectoral added value function has been chosen as the one that optimally reflects sector’s restructuring efficiency. This, in turn, constitutes a qualitative confirmation of previous research result, which has been verified with a quantitative method. Practical outcome is a more precise modelling of efficiency of restructuring processes in the metallurgical sector, both for scientific and business needs. The main research limitations originate from the sector itself—in order to make our tool more universal, further research should be led in parallel branches of industry.
7 citations
Journal Article•
TL;DR: In this paper, the key theoretical and empirical issues in factor demand analysis are discussed, in the light of the most recent generalizations of the concept of cointegration, allowing for economic attractors changing over time, as the evolution of the structural features of the economy proceeds.
Abstract: Since the work of Cobb and Douglas [18], two main innovations have been introduced in applied factor demand analysis, i.e. the use of flexible functional forms and the modelling of dynamics, expectations, and the interrelatedness of the adjustment process. Recently, cointegration theory has provided an additional important contribution, yielding empirical content to the notion of equilibrium employed in economic analysis, encompassing both the idea of centre of gravity relationship, suggested by Classical economists, and the notion of market-clearing position, employed by Neoclassical economist. Also in the light of the most recent generalizations of the concept of cointegration, allowing for economic attractors changing over time, as the evolution of the structural features of the economy proceeds, this paper critically assess the key theoretical and empirical issues in factor demand analysis.
7 citations
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TL;DR: In this article, the authors proposed a method to improve the performance of the system by using the information of the user's interaction with the system and the system itself, including the interaction between the two parties.
Abstract: В статье производится анализ агрегированной производственной функции, вводится аппарат, позволяющий различать движение вдоль такой функции от ее сдвигов. На основании сделанных в статье предположений делаются выводы о характере технического прогресса и технологических изменений. Существенное внимание уделяется вариантам применения концепции агрегированной производственной функции.
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01 Jan 1956TL;DR: In this paper, a very brief treatment of three questions relating to the history of our economic growth since the Civil War is given, namely: (1) How large has been the net increase of aggregate output per capita, and to what extent has this increase been obtained as a result of greater labor or capital input on the one hand and of a rise in productivity on the other? (2) Is there evidence of retardation, or conceivably acceleration, in the growth of per capita output? (3) Have there been fluctuations in the rate of growth of output, apart
Abstract: Introduction This paper is a very brief treatment of three questions relating to the history of our economic growth since the Civil War: (1) How large has been the net increase of aggregate output per capita, and to what extent has this increase been obtained as a result of greater labor or capital input on the one hand and of a rise in productivity on the other? (2) Is there evidence of retardation, or conceivably acceleration, in the growth of per capita output? (3) Have there been fluctuations in the rate of growth of output, apart from the shortterm fluctuations of business cycles, and, if so, what is the significance of these swings? The answers to these three questions, to the extent that they can be given, represent, of course, only a tiny fraction of the historical experience relevant to the problems of growth. Even so, anyone acquainted with their complexity will realize that no one of them, much less all three, can be treated satisfactorily in a short space. I shall have to pronounce upon them somewhat arbitrarily. My ability to deal with them at all is a reflection of one of the more important, though one of the less obvious, of the many aspects of our growing wealth, namely, the accumulation of historical statistics in this country during the last generation. For the most part, the figures which I present or which underlie my qualitative statements are taken directly from tables of estimates of national product, labor force, productivity, and the like compiled by others.
1,031 citations
903 citations