Can the Marginal Productivity Theory of Distribution be Tested?

Jesus Felipe () and John McCombie

Review of Radical Political Economics, 2015, vol. 47, issue 2, 274-291

Abstract: This 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.

Keywords: marginal productivity theory of distribution; aggregate production function; accounting identity; statistical artefact (search for similar items in EconPapers)
JEL-codes: B41 E13 E25 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:47:y:2015:i:2:p:274-291

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