Functional Separability and the Existence of Consistent Aggregates in U.S. Manufacturing: Reply

Ramaiah and Dalal (1996) presented an interesting theorem on direct and indirect separability that pertains to the separability conditions formulated in Yuhn (1991). Their theorem states that simultaneous direct and indirect separability exists only when F(x,T) is strictly quasi-concave in x and is...

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Bibliographic Details
Published in:International economic review (Philadelphia) 1996-02, Vol.37 (1), p.259-260
Main Author: Yuhn, Ky-Hyang
Format: Article
Language:English
Subjects:
Economic models
Economic theory
Economics
International economics
Manufacturing
Production functions
Studies
Online Access:Get full text
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Summary:Ramaiah and Dalal (1996) presented an interesting theorem on direct and indirect separability that pertains to the separability conditions formulated in Yuhn (1991). Their theorem states that simultaneous direct and indirect separability exists only when F(x,T) is strictly quasi-concave in x and is homothetic in x. They have pointed out that since the model does not impose homotheticity, Yuhn's tests for weak separability of the indirect production function in input prices are not equivalent to tests for weak separability of the direct production function in input quantities. The debatability of Ramaiah and Dalal's proposition is argued.
ISSN:0020-6598
1468-2354
DOI:10.2307/2527256