The Aggregate Production Function and Solow's "Three Denials"

Authors

Jesus Felipe, De La Salle University, ManilaFollow
John McCombie, University of CambridgeFollow

College

School of Economics

Department/Unit

Economics

Document Type

Working Paper

Publication Date

3-2024

Abstract

This paper offers a retrospective view of the key pillar of Solow’s neoclassical growth model, namely the aggregate production function. We review how this tool came to life and how it has survived until today, despite three criticisms that undermined its raison d’être. They are the Cambridge Capital Theory Controversies, the Aggregation Problem, and the Accounting Identity. These criticisms were forgotten by the profession, not because they were wrong but because of the key role played by Robert Solow in the field. Today, these criticisms are not even mentioned when students are introduced to (neoclassical) growth theory, which is presented in most economics departments and macroeconomics textbooks as the only theory worth studying.

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Recommended Citation

Felipe, J., & McCombie, J. (2024). The Aggregate Production Function and Solow's "Three Denials". Retrieved from https://animorepository.dlsu.edu.ph/res_aki/193

Keywords

Accounting Identity, Aggregation Problem, Cambridge Capital Theory Controversies, Solow

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