<abstract xmlns="http://www.w3.org/1999/xhtml"><p> In this paper, we investigate the relationship between economic output, labour and capital in the Visegrád Four, Austria and Germany. The main objective is to determine the type of technological progress in these countries over time, specifically in the period 1995-2015. The Sato production functions (a special case of the linearly homogeneous production function) for all the aforementioned countries are estimated using linear and nonlinear techniques. In addition to the original Sato production function, we propose modifying it in using a time variable, which allows us to analyse the development of productivity over time. Based on the NLS estimates of this modification, we create isoquant maps and calculate the value of the marginal rate of technical substitution of labour for capital to identify the nature of technological progress typical for each country. We also compare the properties of both the OLS and NLS estimates. The results are quite specific to individual countries, but there is some room for generalization.</p></abstract>

In this paper, we investigate the relationship between economic output, labour and capital in the Visegrád Four, Austria and Germany. The main objective is to determine the type of technological progress in these countries over time, specifically in the period 1995-2015. The Sato production functions (a special case of the linearly homogeneous production function) for all the aforementioned countries are estimated using linear and nonlinear techniques. In addition to the original Sato production function, we propose modifying it in using a time variable, which allows us to analyse the development of productivity over time. Based on the NLS estimates of this modification, we create isoquant maps and calculate the value of the marginal rate of technical substitution of labour for capital to identify the nature of technological progress typical for each country. We also compare the properties of both the OLS and NLS estimates. The results are quite specific to individual countries, but there is some room for generalization.

Productivity Development in Selected Central European Countries Measured by the Sato Production Function

Review of Economic Perspectives

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

In this paper, we investigate the relationship between economic output, labour and capital in the Visegrád Four, Austria and Germany. The main objective is to...

Productivity Development in Selected Central European Countries Measured by the Sato Production Function

Published Online: Dec 06, 2018

Page range: 353 - 370

Received: Apr 18, 2018

Accepted: Sep 18, 2018

DOI: https://doi.org/10.2478/revecp-2018-0018

Keywords
production function, Sato production function, isoquants, nonlinear least squares method, technological progress

© 2018 Lenka Roubalová, Lenka Viskotová, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Productivity Development in Selected Central European Countries Measured by the Sato Production Function

Published Online: Dec 06, 2018

Page range: 353 - 370

Received: Apr 18, 2018

Accepted: Sep 18, 2018

DOI: https://doi.org/10.2478/revecp-2018-0018

Keywordsproduction function, Sato production function, isoquants, nonlinear least squares method, technological progress

© 2018 Lenka Roubalová, Lenka Viskotová, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
production function, Sato production function, isoquants, nonlinear least squares method, technological progress