By Tanenbaum A.S.
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M. Suárez Estimates of the output elasticity are likely to be sensitive to the specification of the production function. As argued in Sect. 5)]. We expect these restrictions to reduce the absolute size of the estimated output elasticity of public capital (Hypothesis 2). Hypothesis 2 Studies imposing a constant-returns-to-scale restriction on the parameters of the production function yield a smaller b than studies not imposing any restrictions. Estimates of the output elasticity of public capital are likely to be sensitive to the econometric specification of the equation to be estimated.