This paper develops a procedure for estimating parameters of a cross-sectional stochastic frontier production function when the factors of production suffer from measurement errors. Specifically, we use Fuller's (1987) reliability ratio concept to develop an estimator for the model in Aigner et...

In this paper we develop a simple maximum likelihood estimator for probit models where the regressors have measurement error. We first assume precise information about the reliability ratios (or, equivalently, the proxy correlations) of the regressors. We then show how reasonable bounds for the...

In this paper we develop a simple maximum likelihood estimator for probit models where the regressors have measurement error. We first assume precise information about the reliability ratios (or, equivalently, the proxy correlations) of the regressors. We then show how reasonable bounds for the...

So far, the literature on dynamic stochastic general equilibrium models with energy price shocks uses energy on the production side only. In these models, energy shocks are responsible for only a negligible share of output fluctuations. We study the robustness of this finding by explicitly...

We develop a dynamic general equilibrium model, with large and small firms, to examine possible causes and welfare implications of a declining trend in small firms' share of U.S. output since 1958. Numerical experiments indicate that recent technological advances and government tiering policies...