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Can the Marginal Productivity Theory of Distribution be Tested?


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Authors

Felipe, J 
McCombie, JSL 

Abstract

jats:pThis paper shows why attempts to test the neoclassical aggregate marginal productivity theory of distribution are inherently flawed. The use of constant-price value data and an underlying accounting identity mean that the close correspondence often found between the “output elasticities” of a putative aggregate production function and the relevant factor shares is a mere statistical artefact. Likewise, the results of estimating neoclassical labor demand functions must, for the same reason, always give spurious results.</jats:p>

Description

Keywords

marginal productivity theory of distribution, aggregate production function, accounting identity, statistical artefact, B41, E13, E25

Journal Title

Review of Radical Political Economics

Conference Name

Journal ISSN

0486-6134
1552-8502

Volume Title

47

Publisher

SAGE Publications
Sponsorship
The authors received no financial support for the research, authorship and/or publication of this article.