he paper provides a statistical test to assess the adequacy of the static equilibrium framework which can be used prior to specifying a fully dynamic equilibrium model. We develop and apply this test to the production structure and factor demand equations based on the theory of restricted cost...

The recent slowdown in the growth of productivity in the U.S. has attracted considerable attention. The deceleration has been attributed to many factors, including a slowdown in the growth of capital intensity and the stock of R&D, changes in the sectoral composition of output, dramatic rises in...

This paper provides a statistical test to assess the adequacy of static equilibrium models. The test is based on a restricted cost function framework together with the envelope conditions which characterize static equilibrium for the quasi-fixed factors. We also show how restricted cost function...

We formulate a variable cost function model in which certain inputs are treated as quasi-fixed, and develop a simple statistical test of whether optimization occurs for the quasi-fixed inputs. It is shown how to retrieve characteristics of the long-run cost function from the variable cost...