On the identification problem in testing the dynamic specification of factor-demand equations

In this paper we show that the joint estimation of an ‘effective’ (short-run) cost function and a set of factor-demand equations solves the parameter identification problem within the set of the singular demand system originally noted, for consumption analysis, by Anderson and Blundell (Econometrica, 1982, 1559–1571), and recently addressed, for the producer case, by Allen nd Urga (Discussion Paper 10-95, 1995, Centre for Economic Forecasting, London Business School). We conclude that for the producer case the identification problem is solved.