Suchergebnisse

We introduce a constant-elasticity-of-substitution (CES) production function into a real-business-cycle setup with a government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2018). We investigate the quantitative importance of the degree of substi-tutability between labor and capital in the aggregate production function, and found that aspect to matter relatively little for the ability of the model to match the magnitude of the observed business cycle fluctuation

In very different fields of economics, economic inference and policy evaluation require economists to parametrize a production function that links measures of input factors to measures of output. While doing so, strong assumptions are implicitly made about microeconomic variables governing the shape of the aggregate production function. In this paper, I develop an assignment model that provides a microeconomic foundation for aggregate production functions. The shape of the production function depends crucially on the distribution of workers and jobs and the type of technological changes depends crucially on the evolution of these distributions. Sufficient and necessary conditions are provided for the production function to be of the Constant Ratio of Elasticities of Substitution form, a form nesting the broadly used Constant Elasticity of Substitution form. This model provides a way to evaluate how stringent assumptions about the type of production function or technological change are by comparing the implied distribution of jobs and its evolution over time to observations of the distribution of jobs and its evolution over time. -- Microfoundations of production function ; tasks assignment ; technical change

Data at the school district level were used to estimate the relationship between basic skills test scores and various school district, family and community educational inputs. The inputs examined in the regression analysis included expenditures per student, student-teacher ratio, years of teacher's experience, along with other school-related and socioeconomic variables. Expenditures per student are significantly related to basic skills test results in a quadratic manner. Variables measuring family and community structure are shown to be significant to test performance. These results are important for policy-makers who are responsible for the allocation of funds in the education process. A greater reliance on economic incentives is suggested as an alternative to the present system.

This paper develops an assignment model of heterogeneous workers to heterogeneous tasks that provides a microeconomic foundation for aggregate production functions. The shape of the production function is shown to depend crucially on the distribution of tasks. Necessary and sufficient conditions are provided for the production function to be of the constant ratio of elasticities of substitution form, which nests the widely used constant elasticity of substitution (CES) form. For the CES production function, the elasticity of substitution between skill groups of workers is shown to depend only on the variance of tasks in the economy.