Scandinavian Working Papers in Economics
Memorandum,
Oslo University, Department of Economics
No 27/2008: Dynamic Analysis of Structural Change and Productivity Measurement
Finn R. Førsund () and Lennart Hjalmarsson
Additional contact information
Finn R. Førsund: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Lennart Hjalmarsson: Department of Economics, University of Gothenburg
Abstract: A dynamic analysis of structural change is reviewed based on a vintage model of substitutability between inputs including capital before investment, but no substitution possibilities after investment, and ex post production possibilities characterised by fixed input coefficients. Key elements in understanding structural change are the entering of capacity embodying new technology and exiting of capacity no longer able to yield positive quasi-rent. Three production function concepts are identified: the ex ante micro unit production function as relevant when investing in new capacity, the ex post micro production function, and the short-run industry production function giving the production possibilities at the industry level. Productivity measurement, taking these types of production functions into consideration, leads to different interpretations of productivity change than traditional approaches not being clear about which production function concept is used.
Keywords: Structural change; productivity measurement; putty-clay; ex ante production function; short-run industry production function
31 pages, October 1, 2008
Full text files
Memo-27-2008.pdf
- Published as
- Finn R. Førsund, (2010), 'Dynamic Efficiency Measurement', Indian Economic Review, vol 45, no 2, pages 125-159
Questions (including download problems) about the papers in this series should be directed to Mari Strønstad Øverås ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:osloec:2008_027This page generated on 2024-09-13 22:16:45.