Abstract
Large scale econometric models for both market-type and socialist centrally planned economies generally specify production relationships in the form of an aggregate production function. This paper addresses the problem of specifying the functional form of the production function for a socialist centrally planned economy: Poland. Three production functions, Cobb-Douglas, CES and VES, are estimated and a non-nested test for functional form is performed using a pooled cross section-time series regression technique. The estimates of the Cobb-Douglas specification are slightly superior to those of the CES and VES specifications, but the latter provide important detail for historical analysis and interesting implications for growth.
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The author would like to thank John Neufeld for his programming assistance and Keith Crane and Wojciech Maciejewski for their comments on an earlier draft of this paper. In addition I would like to thank the managing editor and an anonymous referee of this journal for their helpful comments. Financial assistance was provided by the UNC-C Research Council. All errors are the responsibility of the authors.
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Kemme, D.M. Discriminating among alternative production functions in Polish industry. Empirical Economics 9, 59–66 (1984). https://doi.org/10.1007/BF01972177
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DOI: https://doi.org/10.1007/BF01972177