Interrelated factor demands from dynamic cost functions: an application to the non-energy business sector of the UK economy.
The writers propose a dynamic cost function that permits them to consistently derive a set of dynamic interrelated factor demand equations in the general error correction form introduced by Anderson and Blundell (1982). They expand on findings recently published in Urga (1996), and they demonstrate...
| Published in: | Economica Vol. 66; no. 263; pp. 403 - 414 |
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| Main Authors: | , |
| Format: | Article |
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Wiley-Blackwell
August 1999
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| Summary: | The writers propose a dynamic cost function that permits them to consistently derive a set of dynamic interrelated factor demand equations in the general error correction form introduced by Anderson and Blundell (1982). They expand on findings recently published in Urga (1996), and they demonstrate that the derivation of an effective underlying cost function facilitates the identification of the full set of parameters of the underlying process. They point out that this does not happen in the standard Anderson-Blundell formulation. The writers then outline an empirical exercise that is used to model the so-called supply side of the London Business School large-scale economic model, and they estimate both the set of factor demands and the underlying dynamic cost function for the nonenergy business sector of the British economy. |
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