Identification of an aggregate production function for the economy of Turkey

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İzmir International Congress on Economics and Administrative Sciences (IZCEAS)
IZCEAS 2018 FULL PAPER BOOK
Identification of an aggregate production function for the economy of Turkey

Identification of an aggregate production function for the economy of Turkey

Authors : Nicholas Olenev

Pages : 1761-1770

View : 106 | Download : 36

Publication Date : 2018-12-31

Abstract :The paper explores an original vintage capital model with putty-clay technology that describes an aggregated production function built on the distribution of production capacity by technology. The production capacities have a limited age. At a given capital intensity and a given depreciation rate, they can evaluate the age structure of production capacities by the past real investments. The time of production capacity creation determines technologies. With increasing age, production capacity is decreasing, keeping the number of workplaces. Scientific and technological progress reduces new, the lowest labor input. We have constructed an analytical production function on a transitional growth path with a changing incremental capital-output ratio for capacities. Unknown parameters of the new production function can be determined indirectly by comparison of pairs of time series for each macroeconomic index calculated by the model and taken from statistics. We identify the parameters of this production function by parallel calculations on supercomputer according to the data of the Turkish economy 1970-2017. The problem of indirect identification of the parameters of the production function is a particular type of the problem of global optimization. In conclusion, we give the economic interpretation of the obtained results.
Keywords : Aggregate Production Function, Production Capacity, Parameter Identification, Parallel Calculations, Turkish Economy

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