Parameter identification of an endogenous production function

The paper presents an endogenous production function and its identification. A new type of production function is constructed where the lifetime of production capacity is assumed to be limited. An expression for production function was numerically derived under conditions of scientific and technological progress and optimal investment in the best technology. Given the capital-output ratio and the rate of physical degradation of capacity, it is possible to estimate the age structure of production capacities by past production investments. All unknown external parameters are determined indirectly due to verification on historical statistics. Parameter identification of the model is a kind of global optimization problem. Parallel calculations in MPI are used for the identification. To ensure sustainable economic growth it is recommended to reduce the maximum age of capacities. © Copyright by the paper's authors.