ON THE RENTAL PRICE OF CAPITAL AND THE PROFIT RATE: THE PERILS AND PITFALLS OF TOTAL FACTOR PRODUCTIVITY GROWTH

This paper considers the implications of the conceptual difference between the rental price of capital, embedded in the neoclassical cost identity (output equals the cost of labour plus the cost of capital), and used in growth accounting studies; and the profit rate, which can be derived from the national income and product accounts (NIPA). The neoclassical identity is a "virtual" identity in that it depends on a series of assumptions (constant returns to scale and perfectly competitive factor markets). The income side of the NIPA also provides an accounting identity for output as the sum of the wage bill plus the surplus. This identity, however, is a "real" one, in the sense that it does not depend on any assumptions and thus it holds always. It is shown that because the neoclassical cost identity and the income accounting identity according to the NIPA are formally equivalent expressions, estimations of aggregate production functions and growth accounting studies are tautologies. Likewise, the test of the hypothesis of competitive markets using Hall's (1988) framework gives rise to a null hypothesis that cannot be rejected statistically.

CORRECTING FOR BIASES WHEN ESTIMATING PRODUCTION FUNCTIONS: AN ILLUSION OF THE LAWS OF ALGEBRA?

this paper argues that the true cause of the endogeneity bias that allegedly appears when estimating production functions, and which the literature has tried to deal with since the 1940s, is s imply the result of omitted-variable bias due to an incorrect approximation to an accounting identity. As a result we question recent attempts to solve the problem by developing new estimators.

Memory in the Photon Statistics of Multilevel Quantum Systems

The statistics of photons emitted by single multilevel systems is investigated with emphasis on the nonrenewal characteristics of the photon-arrival times. We consider the correlation between consecutive interphoton times and present closed form expressions for the corresponding multiple moment analysis. Based on the moments a memory measure is proposed which provides an easy way of gaging the non-renewal statistics. Monte-Carlo simulations demonstrate that the experimental verification of non-renewal statistics is feasible.Comment: 5 pages, 3 figure

Dynamically induced scalar quark confinement

We employ a functional approach to investigate the confinement problem in quenched Landau gauge QCD. We demonstrate analytically that a linear rising potential between massive quarks is generated by infrared singularities in the dressed quark-gluon vertex. The selfconsistent mechanism that generates these singularities is driven by the scalar Dirac amplitudes of the full vertex and the quark propagator. These can only be present when chiral symmetry is broken. We have thus uncovered a novel mechanism that directly links chiral symmetry breaking with confinement.Comment: 12 pages, 2 figures; v2: clarifications added and typos corrected, version to be published by MPL