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The demographics of demand instruments for production function estimation

Authors Cook, David E.
Issue Date 1997-09-21
Summary In this paper, I estimate a representative production function using instrumental variable methods. The instruments are demographic variables which reflect the age structure of the US population. These variables should affect sectoral demand and factor availability. I suggest that due to the low frequency and high predictability of demographic changes, the instruments are useful in illuminating the effects of exogenous changes in capital equipment. I find evidence that strongly favor constant returns to scale in U.S. manufacturing.
Language English
Format Working paper
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