German economy faces wage uncertainty as production function shifts downward
The study tested the neoclassical production function on the West German economy from 1950 to 2015. They found that the true production functions were similar, but predictions of real wages were better in earlier years. This raises questions about whether factors are paid their marginal cost. The study also discussed challenges in accurately testing the function using Germany's National Account dataset and compared theoretical patterns with empirical evidence from 67 years of economic development.