Cointegration of Output , Capital , Labor , and Energy

Cointegration analysis is applied to the linear combinations of the time series of (the logarithms of) output, capital, labor, and energy for Germany, Japan, and the USA since 1960. The computed cointegration vectors represent the output elasticities of the aggregate energy-dependent Cobb-Douglas function. The output elasticities give the economic weights of the production factors capital, labor, and energy. We find that they are for labor much smaller and for energy much larger than the cost shares of these factors. In standard economic theory output elasticities equal cost shares. Our heterodox findings support results obtained with LINEX production functions. PACS: 89.65.Gh Economics; econophysics – 05.45.Tp Time series analysis Corresponding author; email: [email protected]