A physical production function for the US economy

Henry Thompson

Energy Economics, 2016, vol. 56, issue C, 185-189

Abstract: This paper introduces and presents an estimate of a production function motivated by physics with labor and energy providing force to produce work. The separate interactions of capital with labor and energy lead to reliable estimates for US output from 1951 to 2008 with fixed capital assets, the labor force, and total Btu energy inputs. Underpaid energy has an output elasticity twice that of labor. Overpaid labor faces elastic own substitution while there is weak substitution for capital. The policy implications of these properties are discussed.

Keywords: Macroeconomic production; Substitution; Energy (search for similar items in EconPapers)
JEL-codes: O4 Q4 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:56:y:2016:i:c:p:185-189

DOI: 10.1016/j.eneco.2016.03.016

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