The Cobb-Douglas Production Function for South Africa Essay -- South A

Introduction For any firm to produce goods it needs inputs such as smashing and labour. Mankiw (2005) refers to capital set of tools that workers use in the process of outturn e.g. Machineries such as computers whereas labour refers to the hours that employee invest working. Production function refers to the output of a firm, an fabrication or an entire economy for all combination of inputs (Banaeian and Zangeneh, 2001).Economists use exertion function to precise the relationship amidst labour and capital and harmonise to Mankiw (2005). Production functions reveal the available technology for transforming labour and capital into output. thunder (2008) highlighted the fact that theory of productivity was proposed by Knut Wicksell in 1851 which contributed a tummy towards the works of Charles Cobb and Paul Douglas. Cobb-Douglas production function was developed by Cobb and Douglas in 1928 which is a fundamental function level(p) now in both Macro scotchs and Microeconomics. T he Cobb-Douglas production function is normally utilized by economists in the burster of explaining the correlation between contributions of resources involved in production such as labour, capital and technology.Cobb-Douglas production function and constant elasticity of substitution functions argon playing a significant role for analysis in economics.Cobb-Douglas production function is still universally used toward the analysis of productivity and reaping (Felipe and Adams, 2005). Felipe and Adam accepted as true that Paul Douglas is one of the economists who deserve a Novel Price for his marvelous works. Cobb and Douglas suggested that elasticity of substitution between capital and labour should be constant or equals to one even though they did not specify ... ....worldbank.gov. (2011). Data on Gross municipal Product and Total employment of South Africa. World Bank. http//www.southafricanreservebank.co.za. (2011). Data on Fixed Capital Stock of South Africa. South African apply Bank Mankiw, NG. (1995). The Growth of the Nations. Brookings paper of economics activities. pp 275-326Mankiw, NG. (2005). Macroeconomics, International edition. Worth Publishers revolutionary YorkMankiw, N.G (2013) Principle of Macroeconomics 7th edition. Congage Learning United States of America Romer, P.M. (1986). Increasing returns and grand run growth. Journal of political economy Vol 94. Pp 1002-37Romer, P.M. (1990). Capital, Labour and productivity. Journal of political economy Vol. 98, No 5 university of Chicago. Pp 339341Solow, R.M (1956). A contribution to the theory of economic growth. Quarterly Journal of Economics. Pp 65-94