Output, Investment, and Growth in a World of Putty-Clay: Working Paper 2007-07

Mark Lasky

No 18701, Working Papers from Congressional Budget Office

Abstract: This paper presents a putty-clay model of capital that proceeds from profit maximization to an analytic solution for aggregate investment that fits the data well. The key innovation is a production function in which a geometric average of the capital-labor ratio embedded in each unit of capital replaces the aggregate capital-labor ratio in the standard Cobb-Douglas production function. The accelerator in this model depends on the growth rate of output in excess of labor productivity at full employment, rather than on the growth rate of output alone as in previous work.

Date: 2007-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cbo.gov/sites/default/files/110th-cong ... gpaper/2007-07_0.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbo:wpaper:18701

Access Statistics for this paper

More papers in Working Papers from Congressional Budget Office Contact information at EDIRC.
Bibliographic data for series maintained by ().