Dynamic Duality, Factor Demands, and Technology Measurements Under Arbitrary Expectations

Pierre Lasserre and Pierre Ouellette

No 9304, Cahiers de recherche du Département des sciences économiques, UQAM from Université du Québec à Montréal, Département des sciences économiques

Abstract: We present a dynamic model of factor demands based on a contemporary cost function and a dynamic version of Shepard's lemma. While making only very mild assumptions on expectations and technology, we are able to present a complete characterization of the factor demand system and the contemporary cost function. We also establish a duality relationship between contemporary costs and the technology, and we provide formula for easily recovering marginal products, returns to scale, and technological change from estimated factor demands. Specific hypotheses on expectations may be tested within the family or rational expectations. A possible estimation procedure is outlined in an example..

Keywords: Dualité; Investissement; Fonction de coût contemporain; Fonction de coûts futurs anticipés; Demandes de facteurs de production; Rendements d'échelle; Progrès techniques; Information. Dynamic duality; Investment; Contemporary cost function; Expected future cost fuction; Factor demands; Returns to scale; Technological change; Information. (search for similar items in EconPapers)
Date: 1993-02
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Published in Journal of Productivity Analysis, 11(3), 1999, 210-41

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Persistent link: https://EconPapers.repec.org/RePEc:cre:uqamwp:9304

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