Econometrica: Jul 1962, Volume 30, Issue 3

Wages, Capital Costs, and Employment in Manufacturing: A Model Applied to 1947-58 U.S. Data

https://doi.org/0012-9682(196207)30:3<501:WCCAEI>2.0.CO;2-2
p. 501-521

Ronald I. McKinnon

The choice of methods of production as related to factor costs is formulated differently from the ordinary production function by means of a particular activity set. Continuous factor substitutability is maintained in an ex ante sense. The resulting formulation is more amenable to existing data and is applied via a distributed lag model.

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