Kaldor's ‘technical progress function' and Verdoorn's law revisited

Kaldor put forward his technical progress function as an alternative to the neoclas-\r\nsical aggregate production function. It is shown that Verdoorn’s law is its empirical\r\ncounterpart, although allowing for increasing returns to scale. However, both may\r\nbe derived from an aggregate Cobb-Douglas production function. But aggregation\r\nproblems and the Cambridge capital theory controversies have shown theoretically\r\nthat aggregate production functions in all probability do not exist. Moreover, the\r\nonly reason that estimations of ‘aggregate production functions’ give good results is\r\nthe existence of an accounting identity. This article reconsiders the technical progress\r\nfunction and Verdoorn’s law, especially in the light of these problems. Nevertheless,\r\nit is shown that estimates of the law do, in fact, provide insights into the growth\r\nprocess very similar to those of Kaldor, but viewed from another perspective.