The measurement of industrial structure and productivity growth has a long history in economics. Its usefulness has been limited, however, by the rather simple methods that have been applied.
This book introduces a putty-clay production function in the analysis of technical change. A coherent framework for studying industrial structure is developed.
The optimal production structure is conceptualized within a vintage framework. Frontier and short-run industry production functions are used to measure productivity and technical progress. The usefulness of the method is demonstrated in case studies of various industries.