The revival of interest in growth theory with the development of endogenous growth theory is still squarely in the tradition of the neoclassical growth model. Pasinetti (1994) was compelled to remind the participants at a recent conference on economic growth that .
this result [that there is no unambiguous relationship between the rate of profit and the capital-labour ratio], however uncomfortable it may be for orthodox theory, still stands. Surprisingly, it is not mentioned. In almost all new growth theory models, a neoclassical production function, which by itself implies a monotonic inverse relationship between the rate of profits and quantity of capital per man, is simply assumed. (emphasis in the original) .
If this were not enough, there is a whole series of further problems concerned with the question of whether or not micro-production functions can be aggregated to give a macro-relationship which can be shown to reflect the underlying technology of the economy in some meaningful way (Walters, 1963, Fisher, 1987, 1992). Indeed, Blaug (1974), who can be scarcely viewed as sympathetic to the Cambridge UK view of the interpretation, or importance, of the Capital Theory Controversies, nevertheless considers that the aggregation problem effectively destroys the rationale of the aggregate production function. "Even if capital were physically homogeneous, aggregation of labour and indeed aggregation of output would still require stringent and patently unrealistic conditions at the economyv/s level". Moreover, "the concept of the economic meaningful aggregate production function requires much stronger and much less plausible conditions than the concept of an aggregate consumption function. And yet, undisturbed by Walter's conclusions or Fisher's findings, economists have gone on happily in increasing numbers estimating aggregate production functions of even more complexity, barely halting to justify their procedures or to explain the economic significance of their results.
