ON THE SINGLE AND MULTIPLE TIME TRENDS REPRESENTATION OF TECHNICAL CHANGE

This paper is concerned with the estimation of production functions an d measurement of the rate of technical change. Multiple time trends ar e introduced as an alternative to the single time trend representation of technical change. The underlying technology is represented by Cobb -Douglas and translog functional forms. Random effects models with hom oscedastic variances is assumed. The models are estimated using the ge neralized least squares method. The data used are a large rotating pan el data set from Swedish crop producer farms over the period 1976-1988 . The empirical results show that a single or multiple time trends rep resentation yield different time behaviour of technical change. The la tter is found to perform much better.