[PEN-L:1201] Re: Return on R&D - Cobb-Douglas macro production function

[James Devine <jdevine@xxxxxxxxxxxxxxx>]

Anders Ekeland wrote:
> For short: I have a lot of naive questions about the use of C-D in general
> and also for this particular purpose. Is C-D really a valid approach to the
> measuring the return on R&D?

for short: No.

I don't think C-D is a valid approach to _anything_. It's simply a very
simple mathematical form that allows easy manipulation. Its success
among economists is one more sign that they tend to become enamored with
mathematical forms instead of trying to seriously study the economy.

--
Jim Devine jdevine@xxxxxxxxxxxxxxx &
http://clawww.lmu.edu/Faculty/JDevine/jdevine.html