Ex post tests for short- and long-run optimization
type: Item
instance of: scholarly article
title: Ex post tests for short- and long-run optimization
zbMATH Open document ID: 0636.62110
DOI: 10.1016/0304-4076(87)90006-6
author: Klaus Conrad
author: Ralph Unger
published in: Journal of Econometrics
publication date: 1987-01-01T00:00:00Z
review text: The purpose of this paper is to develop tests of long-run equilibrium models where the long-run is defined as the state where the observed levels of output and capital are consistent with optimizing behavior. We use the implied relationship between a restricted translog cost function and derive demand equations to provide a series of nested tests which can be interpreted as ex post tests for short- and long-run optimization behavior. A set of parameter restrictions on the translog system is specified for testing whether observable levels of capital and/or output of a firm correspond to the long-run optimal level. Our tests of the validity of long-run equilibrium specifications are based on data for 28 German industries for the period 1960-1981. For most of the industries the set of restrictions implied by long-run equilibrium had to be rejected.
Mathematics Subject Classification ID: 62P20
Mathematics Subject Classification ID: 91B38
Mathematics Subject Classification ID: 91B50
zbMATH DE Number: 4037002
zbMATH Keywords: neoclassical theory of production
zbMATH Keywords: tests of long-run equilibrium models
zbMATH Keywords: restricted translog cost function
zbMATH Keywords: demand equations
zbMATH Keywords: nested tests
zbMATH Keywords: ex post tests
MaRDI profile type: Publication
full work available at URL: 0304-4076(87)90006-6
OpenAlex ID: W2039387753
cites work: Testing neoclassical production theory
cites work: Conflict among Criteria for Testing Hypotheses in the Multivariate Linear Regression Model
cites work: Productivity measurement with non-static expectations and varying capacity utilization
cites work: A test of static equilibrium models and rates of return to quasi-fixed factors, with an application to the Bell system
description: scientific article; zbMATH DE number 4037002