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Working paper

An Econometric Analysis of a Production Function for New Zealand (WP 01/31)

Issue date: 
Saturday, 1 December 2001
Status: 
Current
View point: 
Document Date: 
Publication category: 
JEL classification: 
C51 - Model Construction and Estimation
E23 - Macroeconomics: Production

Abstract

Using the capital stock series recently released by Statistics New Zealand, two approaches have been employed to estimate a production function. The first approach is based on the estimation of a constant elasticity of substitution (CES) production function with a value added form. The second approach is based on a nested CES function. Using the nested structure, we allow imports as an intermediate input in the production block. The estimated results reveal that the data rejects the Cobb-Douglas specification and the use of the value added form is not justifiable.

Last updated: 
Wednesday, 24 October 2007