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Cointegration of output, capital, labor, and energy

Cointegration of output, capital, labor, and energy Cointegration analysis is applied to the linear combinations of the time series of (the logarithms of) output, capital, labor, and energy for Germany, Japan, and the USA since 1960. The computed cointegration vectors represent the output elasticities of the aggregate energy-dependent Cobb-Douglas function. The output elasticities give the economic weights of the production factors capital, labor, and energy. We find that they are for labor much smaller and for energy much larger than the cost shares of these factors. In standard economic theory output elasticities equal cost shares. Our heterodox findings support results obtained with LINEX production functions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The European Physical Journal B Springer Journals

Cointegration of output, capital, labor, and energy

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References (40)

Publisher
Springer Journals
Copyright
Copyright © 2008 by EDP Sciences, SIF, Springer-Verlag Berlin Heidelberg
Subject
Physics; Superconductivity, Superfluidity, Quantum Fluids; Solid State Physics and Spectroscopy; Fluids ; Complexity; Physics, general; Condensed Matter
ISSN
1434-6028
eISSN
1434-6036
DOI
10.1140/epjb/e2008-00412-6
Publisher site
See Article on Publisher Site

Abstract

Cointegration analysis is applied to the linear combinations of the time series of (the logarithms of) output, capital, labor, and energy for Germany, Japan, and the USA since 1960. The computed cointegration vectors represent the output elasticities of the aggregate energy-dependent Cobb-Douglas function. The output elasticities give the economic weights of the production factors capital, labor, and energy. We find that they are for labor much smaller and for energy much larger than the cost shares of these factors. In standard economic theory output elasticities equal cost shares. Our heterodox findings support results obtained with LINEX production functions.

Journal

The European Physical Journal BSpringer Journals

Published: Nov 1, 2008

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