ABSTRACT OF PAPER
Title: The Cambridge Capital Controversies. A Final Word.
Author: Zambelli Stefano
The Capital Controversy that took place during the ’50 and the ’60 was very lively. One of the major issues was centered on whether the value of the aggregate capital used as a factor of production in (Samuelson Surrogate)neoclassical production function is negatively related with the profit rate or interest rate. The participants of the debate reached consensus on the fact that it is not always the case that this negative relation holds. If this relation does not hold then the aggregate neoclassical production functions (CES, Cobb-Douglas) cannot be used as representing the aggregate production of an economic system. Regardless of this consensus, the result has had no substantial impact in the development of modern economic theory. In this paper I develop a conjecture on why this result has disappeared from mainstream economics and show, providing new evidence, why it cannot be ignored anylonger. With the use of robust empirical evidence it is demonstrated that the Neoclassical Aggregate (Cobb-Douglas like) production function does not exist.
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