By Jesus Felipe
'This is a really vital and long-awaited ebook. The authors supply a cogent advisor to all that's improper with the speculation and empirical purposes of the discredited inspiration of an combination construction functionality. Their critique has devastating implications for orthodox macroeconomics.'
- Anwar Shaikh, New institution for Social learn, US
''There are none so blind as those that won't see.' for many years now John McCombie and Jesus Felipe were publishing papers which draw out the results of the conceptual vacuousness that characterises becoming combination construction functionality requisites to information to check the validity of the marginal productiveness idea of distribution, a critique first built via Henry Phelps Brown and Herbert Simon. through cautious empirical and theoretical paintings, they've got reached the belief that the large literature on mixture construction services and technical development is 'not even fallacious' simply because predictions can't be verified, that they're purely adaptations on manipulations of nationwide accounting identities. might be this time it rather should be 'different', the scales will fall from the profession's eyes. I definitely desire so.'
- G.C. Harcourt, Jesus collage, Cambridge, united kingdom and collage of recent South Wales, Australia
'This is a vital e-book. Proofs that combination creation features don't exist were round for greater than 50 years. This casts doubt not just on macroeconomic idea but additionally on empirical paintings and coverage. but, this has now not deterred macro-economists. The authors express in nice aspect that the plain 'fit' of such capabilities to value-based info is a tautology and never an evidence that such aggregates exist. One hopes that the career will ultimately take note.'
- Franklin M. Fisher, Massachusetts Institute of expertise, US
'Felipe and McCombie have accrued the entire compelling arguments denying the lifestyles of combination construction features and displaying that econometric estimates in response to those fail to degree what they purport to quantify: they're artefacts. Their critique, which needs to be learn by means of any economist doing empirical paintings, is damaging of approximately all that's very important to mainstream economics: NAIRU and capability output measures, measures of salary elasticities, of output elasticities and of overall issue productiveness growth.'
- Marc Lavoie, collage of Ottawa, Canada
This authoritative and stimulating e-book represents a basic critique of the mixture creation functionality, an idea well-known in macroeconomics.
The authors clarify why, regardless of the intense aggregation difficulties that encompass it, mixture creation capabilities frequently supply believable statistical effects. this is often as a result of the use of constant-price price info, instead of the theoretically right actual info, including an underlying accounting id that relates the information definitionally. it truly is during this experience that the combination creation functionality is 'not even wrong': it's not a behavioral courting able to being statistically refuted. The ebook examines the heritage of the construction functionality and indicates how sure seminal works on neoclassical development thought, exertions call for features and estimates of the mark-up, between others, be afflicted by this basic problem.
The ebook represents a basic critique of the mixture construction functionality and should be of curiosity to all macroeconomists.