318 “Output can be thought of as a function of capital labor and technological knowledge. For a single country the latter variable could be approximated by time; we can also consider different countries representing varying technical levels. Decomposition about the changes into these factors had been begun by Tinbergen and Solow. However, they have been constrained, in order to achieve manageable formulas, to use a Cobb-Douglas production function, in which output is linear-logarithmic in capital and labor. This implied that the value shares of the two factors were in constant proportion over time. “I had speculated that the decomposition might be faulty if the wrong production function were used, but I had done little about it. Chenery had been collecting a great deal of data about different countries. In particular, a then graduate student at Stanford, Bagicha Minhas, now a professor at the Indian Statistical Institute in Delhi, had been doing careful cross-country comparisons and held that the share of labor
This is the end of the preview. Sign up
access the rest of the document.
This note was uploaded on 02/01/2011 for the course ECONOMY 6 taught by Professor Fallahi during the Spring '10 term at Cambridge.