Felipe & McCombie: The Aggregate Production Function And The Measurement Of Technical Change
In a recent post, see here, it was explicated that TFP only leads to confusion in mainstream analysis of economic growth. Jesus Felipe & John S.L. McCombie's new book provides an invaluable extensive analysis of the issue at hand.
Felipe and McCombie have gathered all of the compelling arguments denying the existence of aggregate production functions and showing that econometric estimates based on these fail to measure what they purport to quantify: they are artefacts. Their critique, which ought to be read by any economist doing empirical work, is destructive of nearly all that is important to mainstream economics: NAIRU and potential output measures, measures of wage elasticities, of output elasticities and of total factor productivity growth. – Marc Lavoie, University of Ottawa, CanadaSee here