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Estimasi Fungsi Produksi Agregat Indonesia: Pendekatan "Constant Elasticity of Substitution"

Suyanto Suyanto

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Abstract

This study estimates the specification of aggregate production function for Indonesia using the Constant Elasticity of Substitution (CES) production function. The data used in the study is an annual data from 1976 to 2004. By linearized the CES production function, the GLS method of regression (with the Cochrane-Orcutt Iteration Procedure) shows that the elasticity of substitution between labor and capital is 2,0918, which means that the elasticity of substitution between labor and capital is un-perfect substitution. This finding is relevant with the Cobb-Douglas production function as a special case of un-perfect substitution production function. \n \n

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This study estimates the specification of aggregate production function for Indonesia using the Constant Elasticity of Substitution (CES) production function. The data used in the study is an annual data from 1976 to 2004. By linearized the CES production function, the GLS method of regression (with the Cochrane-Orcutt Iteration Procedure) shows that the elasticity of substitution between labor and capital is 2,0918, which means that the elasticity of substitution between labor and capital is un-perfect substitution. This finding is relevant with the Cobb-Douglas production function as a special case of un-perfect substitution production function. \n \n

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Available abstract

This study estimates the specification of aggregate production function for Indonesia using the Constant Elasticity of Substitution (CES) production function. The data used in the study is an annual data from 1976 to 2004. By linearized the CES production function, the GLS method of regression (with the Cochrane-Orcutt Iteration Procedure) shows that the elasticity of substitution between labor and capital is 2,0918, which means that the elasticity of substitution between labor and capital is un-perfect substitution. This finding is relevant with the Cobb-Douglas production function as a special case of un-perfect substitution production function. \n \n

Key concepts: Elasticity of substitution, Constant elasticity of substitution, Substitution (logic), Elasticity (physics), Economics, Econometrics, Production (economics), Production function

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