Is the US aggregate production function Cobb-Douglas? New estimates of the elasticity of substitution

P Antras - Contributions in Macroeconomics, 2004 -
... 4 Estimates under Hicks Neutral Technologi cal Change In this section, I present
estimates of the elasticity of substitution between capital and labor based on both
classical regression analysis and modern time series analysis. ...

[PDF][PDF] Capital-labor substitution and economic efficiency

KJ Arrow, HB Chenery, BS Minhas, RM Solow - The Review of Economics …, 1961 - JSTOR
... 2 ) . Geometrically these conditions state that output per unit of labor is an increas- ing function
of the input of capital per unit of labor, convex from ... value of A. This way of generating production
functions brings to light a connection with the elasticity of substitution which does ...

An estimation of US industry-level capitallabor substitution elasticities: support for CobbDouglas

EJ Balistreri, CA McDaniel, EV Wong - The North American Journal of …, 2003 - Elsevier
... The elasticity of substitution between capital and labor is represented by ß 1 , the coefficient of
interest. ... We use the weighted-symmetric test to determine the order of integration for each series
across industries, the ratio of capital to labor inputs, and the corresponding relative ...

[PDF][PDF] Substitution among capital, labor, and natural resource products in American manufacturing

DB Humphrey, JR Moroney - The Journal of Political Economy, 1975 - JSTOR
... Allen (1938, p. 504) defined the partial elasticity of substitution between inputs i and j by ... LYKKJ
The disturbances UL and UK are likely to be correlated, because random deviations from profit
maximization should affect both the markets for labor and capital. ...

[PDF][PDF] A cost function approach to the measurement of elasticities of factor demand and elasticities of substitution

HP Binswanger - American Journal of Agricultural Economics, 1974 - JSTOR
... If the capital-labor ratio increases, the efficiency gain is labor-saving. This implies that the labor
share declines at a constant factor price ratio. ... marginal products the cost function has the same
disadvantage as the production function in estimating elasticities of substitution. ...

[PDF][PDF] Recent empirical studies of the CES and related production functions

M Nerlove - The theory and empirical analysis of production, 1967 -
... is more than twice its standard error. of capital-labor ratio nearly twice its standard error.
5- '4) Page 10. TABLE 2 Intercountry Estimates of the Elasticity of Substitution for Two-Digit
Manufacturing Industry, Murata-Arrow Industry Data for 1953-56: ...

Corporate taxation, capital formation, and the substitution elasticity between labor and capital

RS Chirinko - National Tax Journal, 2002 - JSTOR
... If production is represented by a Constant Elasticity Of Substitution specification, then the price
elasticity is identical to the substitution elasticity between labor and capital, which is represented
as a parameter, a9 The third section ... and substitution elasticities are equal. 342 ...

[PDF][PDF] An intercountry translog model of energy substitution responses

JM Griffin, PR Gregory - The American Economic Review, 1976 - JSTOR
... The manufacturing energy, labor, and capital cost shares'(valued at factor cost) were derived
from United ... was taken to include all wage and salary supplements to avoid overestimat- ing capital
costs ... Thus we report in Tables 2 and 3 below the elasticities of substitution and price ...

[PDF][PDF] A two-level constant-elasticity-of-substitution production function

K Sato - The Review of Economic Studies, 1967 - JSTOR
... ai represents the elasticity of substitution between capital-in-general and labour-in-general. ...
When prices of capital and of labour are given, entrepreneurs would determine the optimum
combination of capital and labour to produce a given level of output. ...

[HTML][HTML] A cross-country estimation of the elasticity of substitution between labor and capital in manufacturing industries

S Claro - Cuadernos de economía, 2003 - SciELO Chile
... Corbo, V and P. Meller (1982), "The Substitution of Labor, Skill and Capital: Its Implications for ...
4 Taking logarithm from the first order condition with respect to labor (equation (2)) we get ... He
concludes that there is little evidence of variable elasticity of substitution (s as function of ...

Factor substitution and factor-augmenting technical progress in the United States: a normalized supply-side system approach

R Klump, P McAdam, A Willman - The Review of Economics and …, 2007 - MIT Press
... 8 Identification becomes easier, if factor income shares as well as the capital-output ratio are
nonstationary, because in that case the estimation of the elasticity of substitution depends on
the ... Page 5. production function is CES with labor-augmenting technical change. ...

The dynamic demand for capital and labor

MD Shapiro - 1986 -
... I also present alternative estimates with a constant elasticity of substitution production function.
The Cobb-Douglass function has the advantage of simplicity so ... Summing these gives (4) total
labor cost 2 L N W ... 6 data. The expression for the price of capital is given in equation (5). ...

Capital-skill complementarity and inequality: A macroeconomic analysis

P Krusell, LE Ohanian, JV Ríos-Rull… - Econometrica, 2000 - Wiley Online Library
... However, if -0, so that the substitution elasticity is less than one, a relative improvement in the ...
the equation are the ratio of labor income to the sum of labor and capital Ž . ... unskilled workers,
also follows from the firm's profit-maximizing decision in hiring skilled and unskilled labor. ...

Explaining movements in the labor share

S Bentolila, G Saint-Paul - Contributions in Macroeconomics, 2003 -
... YY (q/p)M, and the SK curve is now a relationship between esL, the share of labor in value added
given by esL wL/(p˜Y), and ˜k K/eY, the capital-value added ... of ˜ k but also of q/p. Let us examine
the implications of this extension for both the elasticity of substitution and the ...

Production functions for climate policy modeling: An empirical analysis

E Van der Werf - Energy Economics, 2008 - Elsevier
... (1) we have a nested CES function where inputs capital K and labour L are ... rate of the
energy-output ratio e - q from the (negative of the) growth rate of their relative price p Q - p E ,
the substitution possibilities s ... (7), which gives us the growth rate of the share of capital costs in ...

That elusive elasticity: a long-panel approach to estimating the capital-labor substitution elasticity

RS Chirinko, SM Fazzari, AP Meyer - 2004 -
... with the seminal analysis of Harberger (1959, 1962), the substitution elasticity between capital
and labor, equivalent to ... series) is the product of the spectrum of the input series (eg, the
capital/output ratio ... When the elasticity of substitution is unity, ? equals zero, and uft vanishes ( ...

[PDF][PDF] Production functions with variable elasticity of factor substitution: some analysis and testing

R Sato, RF Hoffman - The Review of Economics and Statistics, 1968 - JSTOR
... Function (where c- = a + bk) The production function (9) is based on the linear elasticity of factor
substitution function C = a ... data for Y and K, but not for r or w. But we do have time series data
for capital's share, denoted as a, and we deduce the series for labor's share as ...

[PDF][PDF] Sectoral Elasticities of Substitution Between Capital and Labor in a Developing Economy: Times Series Analysis in the Case of Postwar Chile

JR Behrman - Econometrica: Journal of the Econometric Society, 1972 - JSTOR
... may be a statistical fiction related to the relatively low estimate of the elasticity of substitution
between capital and labor ... of increasing speed of adjustment) are government, housing services,
manufacturing, construction, agriculture, and transportation (if labor is the ...

A new approach to estimating production function parameters: the elusive capitallabor substitution elasticity

RS Chirinko, SM Fazzari… - Journal of Business & …, 2011 -
... In the CES technology (2), biased technical change is represented by temporal variation in ? ... reject
the hypothesis that s is 1, the value implied by the CobbDouglas production function and often ...
Chirinko, Fazzari, and Meyer: The Elusive CapitalLabor Substitution Elasticity ...

s: The long and short of it

RS Chirinko - Journal of Macroeconomics, 2008 - Elsevier
... ? l y - s uc l t * + v t l y ,. where ky t * = ln ( ( K / Y ) t * ) , ? ky = s ln ( ? ) , s is the substitution
elasticity, ucc t * = ln ( ( P k / P Y ) t * ) , (the Jorgensonian user cost of capital), v t ... ln ( ( L / Y )
t * ) , ? l y = s ln ( 1 - ? ) ,uc l t * = ln ( ( P L / P Y ) t * ) (the user cost of labor or the ...

Create alert

"capital" ("labor" OR "labour") "substitution" "elasticity" (CES OR "constant elasticity of substitution") production function first order ratio estimate regression empirical econometric Cobb-Douglas labor capital substitution elasticity - Google Scholar

A cross-country empirical investigation of the aggregate production function specification

J Duffy, C Papageorgiou - Journal of Economic Growth, 2000 - Springer
... The most important finding is that the sign of ? is found to be negative for both types of labor input,
implying that the elasticity of substitution between capital and labor, s, is greater than one, in
contrast to the Cobb-Douglas specification. Our NLLS estimate for ? ...

[PDF][PDF] On the empirical relevance of the CES production function

P Zarembka - The Review of Economics and Statistics, 1970 - JSTOR
... Sources: Same as table 1 for output and labor; see text for capital. ... The second test we wish
to carry out is whether the elasticity of substitution equals unity for all industries -which is
equivalent to testing whether the ,B coefficient equals zero for all industries. ...

[PDF][PDF] CRESH production functions

G Hanoch - Econometrica: Journal of the Econometric Society, 1971 - JSTOR
... Formally, the elasticity of substitution for this factor with any other factor xi (where di =# 1) yields ...
17 In the sense of "Direct ES (DES)" defined for substitution between two factors if all other factors
are held constant. Cf. ... '" An xl which is determined exogenously, eg, capital in the ...

Capital mobility in neoclassical models of growth

RJ Barro, NG Mankiw, X Sala-i-Martin - 1992 -
... Page 7. (4) U = j" (¿-^??)^?~?)? where ? is per capita consumption, p the subjective rate of time
preference, and 0the inverse of the intertemporal elasticity of substitution. Population, e11 ,
corresponds to the labor force. ... If we assume that human capital and raw labor do not ...

Identifying the elasticity of substitution with biased technical change

MA León-Ledesma, P McAdam, A Willman - 2009 -
... defined as point elasticity, one needs to fix benchmark values for the level of pro- ... ticity of
substitution in the case of linear homogenous production function Yt = F (GK t Kt,GN t Nt) = GN
t Ntf (kt) where kt = (GK t Kt)/(GN t Nt ) is the capital-labor ratio in efficiency units. ...

[PDF][PDF] Biased efficiency growth and capital-labor substitution in the US, 1899-1960

PA David, T Van de Klundert - The American Economic Review, 1965 - JSTOR
... the period 1909-49 and obtained -= 0.569 as an estimate of the elasticity of substitution, and
XL ... by ACMS ex post to justify interpreting the estimated rate of growth of labor efficiency as ... 1I
Because this approach avoids the use of any information regarding the real capital stock, it ...

[PDF][PDF] Nonhomogeneous production functions and applications to telecommunications

HD Vinod - The Bell Journal of Economics and Management …, 1972 - JSTOR
LABOR SUBSTITUTION f1 f2 1 C2 a (1) (2) (3) (4) (5) (6) ...

Production functions: the search for identification

Z Griliches, J Mairesse - 1995 -
... The magnitude of this problem can be seen, in Table 2, in the decline in the estimated capital
elasticity a as one moves from the ... In our own data, the changes are smaller and go slightly in
the "wrong" direction (labor "up" and the sum of the "capital" coefficients down ...

[PDF][PDF] The CES-Translog: Specification and estimation of a new cost function

RA Pollak, RC Sickles, TJ Wales - The review of economics and statistics, 1984 - JSTOR
... data set which combines them, and (iii) the Cowing (1970) data, a cross section sample of
observations on capital, labor, and energy for ... Tables 2, 3, and 4 give the cross Allen elasticities
of substitution calculated at the first, middle, and last set of ... Elasticity CES-TL TL CES-TL TL ...

[PDF][PDF] Price responsiveness of factor utilization in Swedish manufacturing, 1870-1950

RW Parks - The Review of Economics and Statistics, 1971 - JSTOR
... This problem is dis- cussed below. (C) Elasticities of Substitution Table 4 presents the Allen partial
[4.24] [0.38] [2.95] [2.20] 4. Labor -1780 -152 ... [1.43] [1.81] 5. Capital -3605 5412 ...

Capital-energy substitution and shifts in factor demand: A meta-analysis

MJ Koetse, HLF De Groot, RJGM Florax - Energy Economics, 2008 - Elsevier
... As an example we use a production function with capital (K), labour (L), energy (E) and ... for testing
the impact of the oil crises in 1973 and 1979 on subsequent substitution behaviour. ... studies give
a very diffuse answer to the question whether energy and capital are substitutes or ...

[PDF][PDF] Country and sectoral variations in manufacturing elasticities of substitution between capital and labor

J Behrman - … Countries, Volume 2: Factor Supply and Substitution, 1982 -
... missing variables. Fourth, the data are cross sectional, but for many purposes
elasticities of substitution between capital and labor are of interest for questions
regarding what happens with changes over time. For my ...

[PDF][PDF] Life-cycle labor supply with human capital accumulation

KL Shaw - International Economic Review, 1989 - JSTOR
... (15) Et[U2,t+ = U2 = 1/[fi(1 + rt)]. An alternative representation of (14) can be obtained by
dividing (14) by U2,t and substituting in the marginal rate of substitution from equation
(15), to get ... Page 11. LABOR SUPPLY AND HUMAN CAPITAL 441 ...

Information as a factor of production: substitutability and productivity

YM Braunstein - The information society, 1985 - Taylor & Francis
... On the other hand, the coefficient of the labor/information term (ck) is never statistically significant. ...
These estimates indicate that the substitution of information for capital (or vice versa) is less
responsive to changes in their relative prices than would be the case if the ...

[PDF][PDF] Hedonic cost functions for the regulated trucking industry

RH Spady, AF Friedlaender - The Bell Journal of Economics, 1978 - JSTOR
... A firm-specific price of labor was obtained by dividing labor expenditures by the average number
of ... Trucking firms should be able to adjust their capital stock in trucks and terminals quite easily ...
given by (3) and its associated factor share (4), with the appropri- ate substitution of ln ...

[PDF][PDF] Nonlinear estimation of aggregate production functions

RG Bodkin, LR Klein - The Review of Economic and Statistics, 1967 - JSTOR
... productivity relations still yield the highest value of profits per unit of output, ie, the levels of the
capital-labor and hence output-labor ratios which correspond ... The elasticity of substitution, denoted
as o- in conformity with previous notation used in [1], [3], and [8], is given by ...

[PDF][PDF] Production with uncertain technology: some economic and econometric implications

MS Feldstein - International Economic Review, 1971 - JSTOR
... the tradi- tional methods of estimating Cobb-Douglas and constant elasticity of substitu ... t 2] ARROW,
KENNETH J. et al., "Capital-Labor Substitution and Economic Efficiency," Review of ... [8] FELDSTEIN,
MARTIN S., "Alternative Methods of Estimating a CES Production Func- tion ...

Why pay more? Corporate tax avoidance through transfer pricing in OECD countries

EJ Bartelsman, RMWJ Beetsma - Journal of Public Economics, 2003 - Elsevier
... significant) estimate of ? yields a point estimate of for the elasticity of substitution between capital ...
Hence, the substitutability between capital and labor is barely stronger than for a CobbDouglas ...
rows of Table 2 (case B) display the sensitivity of the value–labor ratio with respect ...

[PDF][PDF] Technological change and the distribution of income

M Brown, JS De Cani - International Economic Review, 1963 - JSTOR
... short run a since we built into the model the notion that the ability to substitute capital for labor
in the short run is limited relative to possibilities of substitution in the ... Estimates of X for these
epochs are presented in column 4. Apparently, the rigidity of the capital stock tended to ...

[PDF][PDF] The translog production function and variable returns to scale

HY Kim - The Review of Economics and Statistics, 1992 - JSTOR
Page 1. 546 THE REVIEW OF ECONOMICS AND STATISTICS Economic Research (KI). Wage
cost Labour compensations adjusted for payroll taxes divided by man-hours. ... The data include
real gross output and prices and quantities for capital (K), labor (L), energy (E), and ...

Create alert

"capital" ("labor" OR "labour") "substitution" "elasticity" (CES OR "constant elasticity of substitution") production function first order ratio estimate regression empirical econometric Cobb-Douglas labor capital substitution elasticity - Google Scholar

[PDF][PDF] Research expenditures, education, and the aggregate agricultural production function

Z Griliches - The American Economic Review, 1964 - JSTOR
... an esti- mate of the elasticity of substitution between labor and all other capital inputs (if ...
instrumental variables, the implicit reduced forms have very high R2's, and thus the substitution
of a ... into three roughly equal parts: the contribution of input quality change (in labor and other ...

[PDF][PDF] Inferential procedures in nonlinear models: An application in a UK industrial cross section study of factor substitution and returns to scale

GE Mizon - Econometrica: Journal of the Econometric Society, 1977 - JSTOR
... The three factors are capital K, employees N, and hours of work H. The hypotheses ... estimated
indirectly via the first-order profit maximization condition for the employment of labor. ... F9 of Table
I imply a large number of alternative hypotheses about substitution elasticities and so it ...

Estimating the rebound effect in US manufacturing energy consumption

J Bentzen - Energy economics, 2004 - Elsevier
... US manufacturing sector published by the US Department of Labor; Bureau of Labor Statistics
(2001 ... The input factors are capital and labour employed in the sector as well as purchases ... found
of measurement problems and errors of aggregation, eg related to capital inputs and ...

[PDF][PDF] Roads to prosperity? Assessing the link between public capital and productivity

JG Fernald - American Economic Review, 1999 - JSTOR
... Here, the product 4 * sv is the aggregate elasticity of roads. ... For example, labor input weights hours
worked by different types of workers by estimates of relative wages, and capital input weights
capital stock by dif- ferent ... Let k equal a translog index of vehicles and other capital. ...

Functional forms and parametrization of CGE models

N Annabi, J Cockburn, B Decaluwé - 2006 -
... s i i i i i i r w L K e a a ? ? ? ? ? 1 with i w and ir respectively representing the wage
rate and the rate of return to capital. By normalizing these two rates, the elasticity of
substitution i a is deducted. The Linear Expenditure System (LES) ...

[PDF][PDF] An empirical test of regulatory effects

HC Petersen - The Bell Journal of Economics, 1975 - JSTOR
... and changing) returns to scale, that it be amenable to estimation using three factors (capital, labor,
and fuel ... in plants where capacity is being added is there much possibility for capital-other input
substitution. ... 14 If the rate of dividend growth is less than the cost of capital, then (41 ...

[PDF][PDF] Numerical specification of applied general equilibrium models: estimation, calibration, and data

A Mansur, J Whalley - 1981 -
... We consider a simple two factor, two good model with fixed endowments of labour (it) and capital
(it) at time period t. The model will also ... For example, a coplete general equilibrium model normally
has market clearing conditions requiring that labor and capital employed in ...

Factor shares, the price markup, and the elasticity of substitution between capital and labor

X Raurich, H Sala, V Sorolla - Journal of Macroeconomics, 2012 - Elsevier
... problem lies in the unobservable nature of the values of the aggregate price markup and the
elasticity of substitution. ... this, we use the GDP at factor costs and compute self-employed income
as effectively labor income. ... For the rental price of capital, R t , we have two possibilities. ...

[PDF][PDF] Technological change and factor substitution in the United States: 1929-1967

JP Kalt - International Economic Review, 1978 - JSTOR
... The elasticities of factor substitution in the labor and capital equations both refer to the elasticity
of substitution of the aggregate US production func- tion. ... Application of ordinary least squares
to the labor and capital equations of (12') and (13') yielded low Durbin-Watson ...

[PDF][PDF] Capital, labor, and income in manufacturing

R Solow - … of income shares: Selected theoretical and empirical …, 1964 -
... been shown8 that for observations along any production function, the elasticity of Q ... CAPITAL,
LABOR, AND INCOME IN MANUFACTURING In our article on capital-labor substitution,9 we ...
CAPITAL, LABOR, AND INCOME IN MANUFACTURING Call the left-hand side of (10) R(t ...

[PDF][PDF] Identification and specification analysis of alternative equations for estimating the elasticity of substitution

JR Moroney - Southern Economic Journal, 1970 - JSTOR
to individual two- digit ... Labor compensa- tion is total payrolls divided by total man years of
employment. ... In general, the cost of capital to a firm 6 For the purpose of estimating Cobb ...

Factor substitution in Colombian agriculture

W Thirsk - American Journal of Agricultural Economics, 1974 -
... Using equations (1) to (3) and impos- ing homogeneity to eliminate Uii terms, the amounts of
machinery and labor demanded per unit ... Table 1. Point estimates of substitution elasticities ... e I
and II refer to the different capital price and quantity concepts discussed in the data section ...

Biased technical change and capital-labour substitution in Finland, 1902-2003

J Jalava, M Pohjola, A Ripatti… - Topics in Macroeconomics, 2006 -
... Jalava et al.: Biased Technical Change and Capital-Labor Substitution in Finland ... who had access
to quality-adjusted measures of the flows of capital and labour services, our ... and obtained by using
official investment deflators which may overstate the price of capital equipment. ...

[PDF][PDF] Issues in the development of the neoclassical theory of investment behavior

DW Jorgenson, JA Stephenson - The Review of Economics and Statistics, 1969 - JSTOR
... The Eisner- Nadiri model consists of a CES (constant elas- ticity of substitution ... The evidence is
consistent with unitary elasticity of substitution, supporting our maintained hy ... 1] Arrow, KJ, HB
Chenery, BS Minhas, and RM Solow, "Capital-Labor Substitution and Economic ...

[PDF][PDF] Investment behavior and the production function

DW Jorgenson - The Bell Journal of Economics and Management …, 1972 - JSTOR
... where qQ is the price of output, qK the price of capital input, and qL the price of ... estimated elasticity
of substitution is above unity.4" Zarembka has estimated the elasticity of substitution for two ... Data
on labor input and wage rates are corrected for quality change, but the effects of ...

Empirical assessment of energy-price policies: the case for cross-price elasticities

M Frondel - Energy Policy, 2004 - Elsevier
... Here, we will supplement their note by considering the complete set of substitution possibilities
in this four-factor setting, and by deriving standard errors. For their four-input KLEM-model,
including capital (K), labor (L), energy (E), and all other intermediate materials (M) (see ...

Trade reforms, labor regulations, and labor-demand elasticities: Empirical evidence from India

R Hasan, D Mitra, KV Ramaswamy - The Review of Economics and …, 2007 - MIT Press
... As explained before, the elasticity of substitution goes up due to trade liberalization. ... wages, output,
factor prices other than wages, and indicators for protection and labor market rigidity ... of gross
output produced, intermediate inputs, wage bill, the book value of capital stocks, and ...

The relative share of labor in United States agriculture, 1949–1968

TP Lianos - American Journal of Agricultural Economics, 1971 -
... From these data we were able to compute the relative share of labor as shown earlier. ... The
limited reliability of this cost as an estimate of the return to capital is one reason for using
equation (18) to obtain an estimate of the elasticity of substitution. ...

[PDF][PDF] Constrained joint estimation of factor demand and production functions

RM Coen, BG Hickman - The Review of Economics and Statistics, 1970 - JSTOR
... estimating the production function. (This is a particularly attractive approach in estimation of the
constant-elasticity-of-substitution (CES) production function, since information ... The first point to
notice is that capital and labor are not jointly dependent variables in this system. ...

[PDF][PDF] The effects of relative prices and capacity on the demand for labour in the US manufacturing sector

MI Nadiri - The Review of Economic Studies, 1968 - JSTOR
... the equilibrium, ie when the factor price ratio, (clw), is equal to the technical rate of substitution
between Km ... RELATIVE PRICES, CAPACITY AND DEMAND FOR LABOUR ... In fact, the sign of
the capital stock variable becomes negative and the lag structure of the model changes ...

Create alert

"capital" ("labor" OR "labour") "substitution" "elasticity" (CES OR "constant elasticity of substitution") production function first order ratio estimate regression empirical econometric Cobb-Douglas labor capital substitution elasticity - Google Scholar

Information technology and productivity: evidence from country-level data

S Dewan, KL Kraemer - Management Science, 2000 -
... Further, elasticities of substitution between IT and non-IT inputs are esti- mated to be very close
to unity, consistent with the Cobb ... Non-IT Capital as fraction of GDP 1.233 0.454 1.378 0.478 1.004
0.294 Labor Cost as fraction of GDP 0.512 0.261 0.652 0.161 0.178 0.099 Note. ...

Capital-skill complementarity in West German manufacturing

F Fitzroy, M Funke - Empirical Economics, 1995 - Springer
... that is further enhanced by low-wage competition from relatively well-trained labour in the ... Empirical
Economics 17:153-168 Fallon PR, Layard PRG (1975) Capital skill complementarity, income ...
Industrial and Corporate Change 1 : 37-64 Hamermesh DS (1993) Labor demand. ...

Capital-skill complementarity? Evidence from a panel of countries

J Duffy, C Papageorgiou… - Review of Economics and …, 2004 - MIT Press
... in A, then it need not be the case that the relative demand for skilled labor increases. ... 8 Once again,
notice that the direct partial elasticities of substitution between K and N and ... is no consensus yet
on the appropriate functional form to use to capture capital-skill complementarity. ...

[PDF][PDF] That elusive elasticity: a long-panel approach to estimating the price sensitivity of business capital

RS Chirinko, SM Fazzari… - No. B3-1, 10th …, 2002 -
... pletely absorb the productivity shock. When the elasticity of substitution is unity, ? ... elasticity. Instead,
our approach avoids these problems by exploiting panel data and ... The financial cost of capital
(rt) is a weighted average of the cost of equity (the dividend-price ratio for Standard ...

Input price shocks and the slowdown in economic growth: the case of UK manufacturing

M Bruno, JD Sachs - 1982 -
... This adjustment is studied under alternative assumptions of real wage stickiness and full labor
market clearing. ... observing the symmetry with the case of the very short run with capital now ... as
s/sk > sk/s, a condition on the relative labour share which empirically usually holds. ...

Skipper skill and panel data in fishing industries

D Squires, J Kirkley - Canadian Journal of Fisheries and …, 1999 - NRC Research Press
... Labor is represented in the model by the flow of labor services and measured as the ... The
CobbDouglas technology implies con- stant and unitary elasticities of substitution between all
inputs. ... where Xi and Xj represent the economic inputs (capital services, la- bor services, fuel ...

[PDF][PDF] Substitution between energy and non-energy inputs in the Netherlands 1950-1976

JR Magnus - International Economic Review, 1979 - JSTOR
... Labor input thus corresponds to the number of man-hours worked. ... Thus we assumed that the
investors ignore the anticipated capital gain when they consider purchasing a capital good, in
which case the term q(t) - q(t - 1) can be eliminated from equation (7 ... SUBSTITUTION 473 ...

[PDF][PDF] Aggregate production functions and types of technical progress: A statistical analysis

MJ Beckmann, R Sato - The American Economic Review, 1969 - JSTOR
... obtained in Case 1-7 when the capital-output ratio is a separable function of labor's share and ...
general way from the invariant rela- tionship between the share and the elasticity of factor
substitution (See our ... we applied, r interest rate (9) r = a + by + u(t) output y _ . capital and (10 ...

Econometric studies of investment behavior: a comment

R Eisner - Economic Inquiry, 1974 - Wiley Online Library
... Bischoff finds that the residuals in their dis- tributed lag function are serially correlated, so their
estimates of the elasticity of substitution and degrees of return to scale are inconsistent [4, p. 3591
(p. 1131). ... 35-94. 38. ---,Tomment'' on Eisner, “Capital and Labor in Production ...

[BOOK][B] An assessment of CES and Cobb-Douglas production functions

E Miller - 2008 -
... insurmountable problems for theoretical and applied work in fields such as growth, labour or
trade. ... the CES specification and labor-hours data to estimate factor elasticities in the United ... national
GDP growth is estimated using a Cobb-Douglas model with human capital, the fit is ...

Selecting functional form in production function analysis

RC Griffin, JM Montgomery, ME Rister - Western Journal of Agricultural …, 1987 - JSTOR
... The concept of elasticity of substitution and the CES class of production ... 2 For any change along
an isoquant, d{x¡/Xj) is the change in the use of Xi as compared with that of xJt and d{dxjdx^ is
the corre- sponding change in the marginal rate of technical substitution. ...

[PDF][PDF] Prices, technology, and farm size

Y Kislev, W Peterson - The Journal of Political Economy, 1982 - JSTOR
... Elasticity of Substitution The elasticity of substitution, /3, between labor and capital is estimated
in the demand for labor equation ... where y is value added per unit of labor, Wf is wage rate in
agri- culture, a the constant, and e the stochastic disturbance term. ...

Elasticities of substitution among capital and occupations in US manufacturing

RD Weiss - Journal of the American Statistical Association, 1977 -
... Page 6. Substitution Among Capital and Occupations 769 Es were computed for each state and
each pair of inputs using the CRESH and HCDE formulas (2.2) and (2.3), respectively; means
of the ES between capital and the labor inputs are presented in columns (4 ...

[PDF][PDF] The class of homothetic isoquant production functions

S Clemhout - The review of Economic studies, 1968 - JSTOR
... social physical product (MS) [3]. sK the MKP = MKS or " true rent " on capital, can be ... by labour
then our analysis requires an explicit knowledge of the size of labour's share in ... so-called
distribution parameter 3 must work jointly with the elasticity of factor substitution parameter p ...

The Solow model with CES technology: nonlinearities and parameter heterogeneity

WH Masanjala, C Papageorgiou - … of Applied Econometrics, 2004 - Wiley Online Library
... by obtaining each country's steady-state physical and human capital per augmented labour values
implied ... function leading to smaller elasticity of substitution and negative share for human
capital.18. ... In particular, we find evidence that the elasticity of substitution parameter s is ...

A translog cost function analysis of US agriculture, 1939–77

SC Ray - American Journal of Agricultural Economics, 1982 -
... 0.6196 6.9961 1.8846 -1.5140 1.1667 0.4522 1.4787 0.3344 -3.0374 -0.1094 0.7482 5.7250
1.5272 -1.1473 1.2117 0.4865 1.6607 0.2249 -5.9461 -1.0278 Note: $12 is elasticity of substitution
between labor and capital; $13 is elasticity of substitution between ...

[PDF][PDF] Neoclassical theory of investment behavior: A comment

R Eisner, MI Nadiri - The Review of Economics and Statistics, 1970 - JSTOR
... around unity, as the cross-section studies suggest, the elasticities of substitution between labor
and capital in ... by-Jorgenson and Stephenson on the basis of their assumed elasticity of substitution
of unity ... Using the preferred c2 as the price of capital service, we secure a range of ...

[BOOK][B] Elasticity of substitution between capital and labor: a panel data approach

S de Abreu Pessoa, SM Pessoa, R Rob - 2003 -
... preference and ? is the intertemporal elasticity of substitution. ... disembodied, labor-augmenting
technological progress at the rate g, equation (18) is replaced by ... Pessoa and Rob (2003))
the relationship between the price of capital p and the investment- ...

How sound are the foundations of the aggregate production function?

J Felipe, JSL McCombie - Eastern Economic Journal, 2005 - JSTOR
... For example, if the markup increases, labor's share will fall and this will result in a fall in labor's
"output elastic- ity" and a corresponding rise in capital's share and its ... function gives a good fit
to the data does not imply that the aggregate elasticity of substitution (a parameter ...

Declining Labour Share-Evidence of A Change in Underlying Production Technology?

A Ripatti - Bank of Finland Discussion Papers, 2001 -
... have come to believe that capital accumulation, tech- nical progress and labor force expansion ...
In the former case labour and capital are technical substitutes, while technical comple ... to obtaining
estimates of the substitution parameter from estimates of labour demand elasticity is ...

Create alert

"capital" ("labor" OR "labour") "substitution" "elasticity" (CES OR "constant elasticity of substitution") production function first order ratio estimate regression empirical econometric Cobb-Douglas labor capital substitution elasticity - Google Scholar

[PDF][PDF] Elasticity of factor substitution in cross-section production functions

G Fishelson - The Review of Economics and Statistics, 1979 - JSTOR
... predictions of value added and factor shares could be made once the physical quantities of labor
and capital are known ... Moroney, JR, "Identification and Specification Analysis of Alternative
Equations for Estimating the Elasticity of Substitution," Southern Economic Journal ...


RN Boisverf - 1982 -
... This requires formal consideration of inputs other than aggregate labor and capital- Several factors ...
Therefore, to avoid duplication, the discussion of substitution elasticities is deferred to the next
section- Interpretation 2 — Taylor Approximation The second interpretation of ...

[PDF][PDF] Introducing management into the production function

RN Mefford - The Review of Economics and Statistics, 1986 - JSTOR
... This form assumes Hicks neutral technical change12 but allows non-homotheticity and a vary-
ing elasticity of substitution between capital ... indicates, however, that they do not alter very much
the coefficients on unadjusted capital and labor (in the case of the capital vari- able ...

Productivity and the density of economic activity

A Ciccone, RE Hall - 1993 -
... We also do not include measures of inputs other than labor, capital, and land. ... at the national level
in different years and annual changes in the rental rate of capital as fixed effects. ... The elasticity
of average product with respect to education, 77, is .46 with a standard errror of .40. ...

Elasticity of substitution between capital and labor and its applications to growth and development

SD Pessoa, S Matos-Pessoa, R Rob - 2005 -
... preference and ? is the intertemporal elasticity of substitution. ... model to the case where labor is
supplied elastically and is taxed, and/or where consumption is taxed. ... As we show else- where
(see Pessoa and Rob (2003)), the relationship between the price of capital p and the ...

Infrastructure and productivity: a nonlinear approach

VG Duggal, C Saltzman, LR Klein - Journal of Econometrics, 1999 - Elsevier
... of labor and capital proportionally, so that the marginal rate of technical substitution of capital ...
The labor variable is total employee hours, calculated as the sum of total employee hours worked ...
The real user cost of capital for equipment, (UCKER) and for structures, (UCKSR) are ...

[PDF][PDF] Time-Series Production Functions and Technological Progress in American Manufacturing Industry

CE Ferguson - The Journal of Political Economy, 1965 - JSTOR
... things equal, if the wage rate in- creases relative to the rate of return on capital, the profit ... 2 In
addition, the use of time-series data to estimate the elasticity of substitution imparts a downward
bias that is basically attributable to changes in the quality of labor service, especially ...

How substitutable is natural capital?

A Markandya, S Pedroso-Galinato - Environmental and Resource …, 2007 - Springer
... A second round of regressions was carried out using the other measure of human capital that
is related to schooling and labor productivity, HE. ... Table 3 Substitution elasticities (ˆsi ), using
human capital related to schooling (HE) Inputs Substitution elasticity R2 Adj. ...

[PDF][PDF] Production functions in manufacturing: some preliminary results

Z Griliches - The theory and empirical analysis of production, 1967 -
... The halving of the elasticity of substitution would have a depressing effect on the rate of growth
of ... of Manu- factures.25 Bell (1964) was the only one to use the capital-labor-ratio version of ... or
the data are not very good in accounting for the annual fluctuations in labor productivity. ...

[PDF][PDF] Labor quality, returns to scale and the elasticity of factor substitution

G Philpot - The Review of Economics and Statistics, 1970 - JSTOR
... This content downloaded from on Sat, 10 May 2014 21:30:05
PM All use subject to JSTOR Terms and Conditions Page 6. ELASTICITY OF

[BOOK][B] Estimation of frontier production functions and the efficiencies of Indian farms using panel data from ICRISAT's village level studies

GE Battese, TJ Coelli, TC Colby - 1989 -
... located about 70 kilometers south o[ the city of Hyderabad, the capital of Andhra Pradesh
State. ... perfect substitution between the different components of land and labour is ... (16) with
common elasticities of land, human labour, bullock labour and ...

[PDF][PDF] Paul Douglas's measurement of production functions and marginal productivities

PA Samuelson - The Journal of Political Economy, 1979 - JSTOR
... only one observed point; and from one point no one can infer elasticities of demand, of substitution,
or anything ... To simplify, let them all have the same (leets) capital stock, C1 = C2 ... log Lj); then
Douglas getsf(L) exactly bLa, 0 < a < 1. Reder can say that observed labor share, k ...

Long-run relationships between labor and capital: Indirect evidence on the elasticity of substitution

M Juselius - Journal of Macroeconomics, 2008 - Elsevier
... The flow of labor services is approximated by the hours worked in manufacturing and the price
of labor is approximated ... Finnish manufacturing prices P, the rental price of capital P k , and wages
W over the sample 1980:1–2005:4 ... 4. Direct estimates of the elasticity of substitution. ...

[PDF][PDF] Estimation and prediction with CES and VES production functions

CAK Lovell - International Economic Review, 1973 - JSTOR
... which can be interpreted as a measure of the shift in labor productivity caused by ... TABLE 1
ESTIMATES OF THE ELASTICITY OF SUBSTITUTION, 1947-63 Production Function ... However,
they found evidence of capital-using technical change, which accounts for their relatively ...

Industry-level Econometric Estimates of Energy-Capital-Labor Substitution with a Nested CES Production Function

Y Dissou, L Karnizova, Q Sun - Atlantic Economic Journal, 2012 - Springer
... Finally, the relatively low values of the elasticities sKE,L and sLE,K at the upper nesting suggest
low substitutability between labor and capital. By contrast, the largest estimates are for the
elasticities of substitution between labor and energy sL,E. These values vary ...

The normalized CES production function: theory and empirics

R Klump, P McAdam, A Willman - Journal of Economic Surveys, 2012 - Wiley Online Library
... production function Y t =F(K t , N t ) =N t f(k t ) where k t =K t /N t is the capitallabor ratio in
efficiency units. ... The definition of the substitution elasticity, can then be viewed as a second-order
differential equation in k having the following general CES production function as its ...

[PDF][PDF] The elasticity of substitution revisited: the effects of secular changes in labor force structure

CU Chiswick - Journal of Labor Economics, 1985 - JSTOR
... appears fairly consistent that, during the time period over which estimates of the elasticity
substitution were made ... et al., and Kendrick and Sato, the rate of improvement in the quality of
labor would have been at least as great as the rate of increase in physical capital per worker. ...

Parameter estimation and measures of fit in a global, general equilibrium model

J Liu, C Arndt, TW Hertel - Journal of Economic Integration, 2004 - JSTOR
... In the upper level nest, composite imports and domestic production for each commodity are
combined with elasticity of substitution oD. ... Land, labor, capital and national accounts data were
derived from a variety of sources. ... Land Unskilled Skilled Capital Investment Gov. Esp. ...

Energy price changes and the induced revaluation of durable capital in US manufacturing during the OPEC decade

ER Berndt, DO Wood - 1984 -
... as the capital revaluation elasticity is simply, for the CES function, the negative of the ex ante
substitution elasticity, ie ... PE (energy), PM (non-energy intermediate materials), PL (labor), the
quantity Page 21. -18- ... measured capital stock, denoted RK. We now provide further details. ...


FW Bell - Journal of Regional Science, 1967 - Wiley Online Library
... will increase secularly on the basis of technological change and capital-labor substitution and
exhibit no ... components along with some exogenous variables determine the demand for capital
via the ... s) which in conjunction with the production function yield the demand for labor. ...

Create alert

"capital" ("labor" OR "labour") "substitution" "elasticity" (CES OR "constant elasticity of substitution") production function first order ratio estimate regression empirical econometric Cobb-Douglas labor capital substitution elasticity - Google Scholar

[PDF][PDF] The estimation of supply response in Australian agriculture: The CRESH/CRETH production system

DP Vincent, PB Dixon, AA Powell - International Economic Review, 1980 - JSTOR
... given the supply of his fixed inputs (land, capital and his own labor and management). ... of the
difficulties encountered on the input demand side, we aggregated land and capital into a ... specific
inputs in total (non-specific) cost, and Ih is the common substitution parameter (related ...

The business value of information technology and inputs substitution: the productivity paradox revisited

WT Lin, BBM Shao - Decision Support Systems, 2006 - Elsevier
... organizational implication that IT capital (I) and non-IT capital (K) are equally important in the
production process but, technically, IT capital cannot be used to substitute for labor (L) totally,
although IT capital may be ... Next, we consider the issue of inputs substitution empir.

Estimation of cross-country differences in industry production functions

J Harrigan - Journal of International Economics, 1999 - Elsevier
... real value added y c as a constant returns to scale function of the real capital stock k c ... market
behavior used to derive (3), labor's share in total cost is equal to the elasticity of output ... the sample
mean for labor's share exceeds one, so I use the sample mean for labor's share in all ...

[PDF][PDF] Production and cost functions: An econometric survey

AA Walters - Econometrica: Journal of the Econometric Society, 1963 - JSTOR
... LABOR FIGURE 1 ... industry suggested that a doubling of cumula- tive output gave rise to a decrease
of about 18-20% in labour inputs [10 ... In Arrow's model, however, learning takes place only in the
capital goods industry; no general learning effect due to progressively better use ...

On the class of separable non-homothetic CES functions

R SATO - ?? ?????, 1974 -
... [1] Arrow, K., et al., "Capital-Labor Substitution and Economic Efficiency," Review of Economics
and Statistics, Vol. 43, 1961, pp. ... Review of Economic Studies, June, 1963. [5] Samuelson, PA,
"Two Generalizations of the Elasticity of Substitution" in Value, Capital and Growth ...

Inflation, tax rules, and investment: some econometric evidence

MS Feldstein - 1980 -
... But when an investment commits the firm to a future capital stock with a fixed capitallabor ratio,
expectations about the future are ... response to other sources of variation in the user cost of capital. ...
substitution of one and with the assumption that firms respond in the same iay ...

[PDF][PDF] A measure of the change in relative exploitation of capital and labor

M Brown - The Review of Economics and Statistics, 1966 - JSTOR
... EXPLOITATION OF CAPITAL AND LABOR ... X = [kC-a + (1 - k)Na]-v/a (20) where C is the net capital
stock adjusted for capacity utilization. ... data for three industries of the marginal rate of substitution
equilibrium equation and direct estimates of the CES production function for the ...

The Balassa-Samuelson Model: A General-Equilibrium Appraisal*

PK Asea, EG Mendoza - Review of International Economics, 1994 - Wiley Online Library
... This equation incorporates the steady-state equality of the intertemporal marginal rate of
substitution in consumption ... and technology that determine the ratio of the marginal products of
labor (in tradable ... the investment-output ratio in the tradable sector and the capital-output ratio ...

[PDF][PDF] Additive general error models for production, cost, and derived demand or share systems

MB McElroy - The journal of political economy, 1987 - JSTOR
... forms (eg, the trans- log) as well as the exact functional forms (eg, the constant elasticity of
substitution [CES] production function). ... 9 Note that the elasticity of share i with respect to Ei is
aSi Ei ... Assume that the deterministic production function q(x) is such that the dual mean cost ...

Implications of factor substitution, economies of scale, and technological change for the cost of production in the United States pulp and paper industry

JC Stier - Forest science, 1985 -
... This is evident from the very low factor substitution elasticities and the related price elasticities
of ... The source of change in labor's relative share: a neoclassical analysis. ... Technological progress,
factor proportions, and the relative share of capital in American manufacturing, 1942 ...

[PDF][PDF] Capital utilization and returns to scale

C Burnside, M Eichenbaum, S Rebelo - NBER Macroeconomics Annual …, 1995 -
... a geometric average of total hours (Lt), energy consumption (Et), and the price of electricity relative
to labor (pEt ... a2/p. Our basic production structure coincides with the special case in which the
elasticity of substitution between capital ... Capital Utilization and Returns to Scale * 81 ...

Substitution of labour, capital and energy in the manufacturing sector of Pakistan

M Iqbal - Empirical Economics, 1986 - Springer
... 12 All of these studies have obtained an elasticity of substitution between labour and
capital, OLK only by fitting CES production functions. Page 11. Substitution of Labour,
Capital and Energy in the Manufacturing Sector of Pakistan 91 ...

[PDF][PDF] Estimation of factor contribution to growth under structural disequilibrium

M Bruno - International Economic Review, 1968 - JSTOR
... that we have indicated here are not 'true' confidence intervals in a statistical sense, since they
have been obtained from straight substitution of the ... A note of caution: To say that labor got more
than its marginal product is not to imply that private owners of capital got less ...

Telecommunications, CES production function

G Fishelson - Applied Economics, 1977 - Taylor & Francis
... Such an innovation would shift the elasticity of substitution between labour and capital to close
to unity ... The Translog Function and the Substitution of Equipment, Structures and Labor inU .S.
Manufacturing, 1929-68, Journalof Econometrics, 1,8 1- 1 13. DeJanvry, A. (1972). ...

Divergency between average and frontier production technologies: an empirical investigation for Bangladesh

M Alauddin, D Squires, C Tisdell - Applied Economics, 1993 - Taylor & Francis
... The direct elasticities of substitution (DES) for capital and labour are reported in Table 4 ... Hence,
the capital-labour isoquants for the production frontiers and unrestricted translog produc- tion
function are ... Moreover, if capital K is substituted for labour L, so that the ratio of capital to ...

The CES production function, the accounting identity, and Occam's razor

J Felipe, JSL McCombie - Applied Economics, 2001 - Taylor & Francis
... 1987) summarized the position as `that the analytic use of such aggregates as ``capital'', ``output'',
``labour ... case, and thus ˆb1 would be an estimate of the aggregate elasticity of substitution ¼.10 ...
the slope parameter ·2 is simply an estimate of the bias in the labour share identity ...

[PDF][PDF] A measure of technological employment

M Brown, JS de Cani - The Review of Economics and Statistics, 1963 - JSTOR
... 2), but that labor intensity increased between r{2) and r(3). The move- ment of the short-run
elasticity of substitution is traced ... 0.1873 (0.0539) 0.9506 * ß is the estimate of the parameter on
log t. Since neutral technological change displaces labor as well as capital, we would ...

[PDF][PDF] Issues in econometric studies of investment behavior

LR Klein - Journal of Economic Literature, 1974 - JSTOR
... Unitary elasticity of substitution, constant re- turns to scale, and market perfection are strong
assumptions ... atten- tion to simultaneous equations structure of joint demand for both labor and
capital ... High rates of capital forma- tion in electric and other energy producing centers are ...

[CITATION][C] Productivity change and labor absorption in Japanese cotton spinning, 1891-1935

G Saxonhouse - Quarterly Journal of Economics, 1977 - World Scientific

How responsive is business capital formation to its user cost?: An exploration with micro data

RS Chirinko, SM Fazzari, AP Meyer - Journal of public economics, 1999 - Elsevier
... true UCE much lower than most economists assume, perhaps due to limited substitution
possibilities in ... Assuming that the production function has a constant elasticity of substitution (s)
between capital and variable inputs ... or output), and the user cost (or rental price) of capital (U ...

Create alert

"capital" ("labor" OR "labour") "substitution" "elasticity" (CES OR "constant elasticity of substitution") production function first order ratio estimate regression empirical econometric Cobb-Douglas labor capital substitution elasticity - Google Scholar

[PDF][PDF] The relation between energy and non-energy inputs in India's manufacturing industries

M Williams, P Laumas - The Journal of Industrial Economics, 1981 - JSTOR
... 1 (JAI Press, 1978), pp.51 - 75. [111 HUMPHREY, DB and MORONEY, J. R., "Substitution Among
Capital, Labor and Natural ... [151 UZAWA, H., "Production Functions with Constant Elasticity of
Substitution," The Review of Economic Studies, 29 (October, 1962), pp. ...

[PDF][PDF] Investment behavior and neo-classical theory

R Eisner, MI Nadiri - The review of economics and statistics, 1968 - JSTOR
... the rental price or user cost of capital, whatever the fate of the marginal condition for labor (or
other ... C (21) 'K P and writing 6vy (1 - pl) as p 1 + p, we find that desired capital is K ... could use this
investment function to estimate the degree as well as the elasticity of substitution of the ...

The effect of foreign capital and imports on economic growth: Further evidence from four Asian countries (1970–1998)

K Marwah, A Tavakoli - Journal of Asian Economics, 2004 - Elsevier
... production technologies of (4) and (5) allow for both non-unitary elasticities of substitution and
variable ... For domestic capital, it varies from 0.173 to 0.247, and for FDI, from 0.044 to 0.086. ... In
Indonesia and the Philippines, the production elasticity of labor is higher than of imports ...

[PDF][PDF] The production function and technical change in postwar Soviet industry: A reexamination

P Desai - The American Economic Review, 1976 - JSTOR
... with 1960 = 100 are stated in Table 1. d The equations in the text also specify the limits to the
values of the parameters in columns (3) to (8). e The elasticity of substitution in CES (I ... For CES
(1I), the elasticity reported in the column is between capital and labor, whereas that ...

Interregional comparison of production structures

HD Vinod - Journal of Regional Science, 1973 - Wiley Online Library
... An advantage of our procedure is that it, points out where the exceptions are. The elasticity
of substitution u is greater than unity in Table I, and varies between 1.218 to 1.651. ...
Capital-Labor Substitu- The Neoclassical Theory of Production and Distribution. ...

[PDF][PDF] Productivity Growth and Convergence in Agriculture versus Manufacturing*

W Martin, D Mitra - Economic Development and Cultural Change, 2001 - JSTOR
... 411 ternational Labour Organisation on the manufacturing labor force for most countries at
between one and three points in time within our sample period. ... The capital and labor shares in
manufacturing estimated using CD-CRS were 69% and 31%, respectively. ...

Interfuel Substitution: A Meta-Analysis

DI Stern - Journal of Economic Surveys, 2012 - Wiley Online Library
... A few studies, such as Pindyck (1979), estimate an energy sub-model and a
capitallabour–energy–materials 'super-model'. ... SESCO, Shadow elasticity of
substitution between coal and oil, 4.094, -0.886, 1.144, 0.959, 1.474. ...

Intertemporal and intratemporal substitution, and the speed of convergence in the neoclassical growth model

SJ Turnovsky - Journal of Economic Dynamics and Control, 2002 - Elsevier
... equation(5). with the corresponding share of labour income being 1-s. Dividing (2b) by (2a) and ...
labor supply declines, the share of output earned by labor increases, so that capital's share of ...
In general, we see that the percentage increase in k exceeds that labor by an amount ...

Long-run substitutability between more and less educated workers: evidence from US states, 1950–1990

A Ciccone, G Peri - Review of Economics and Statistics, 2005 - MIT Press
... Including physical capital in the analysis is straightforward and does not lead to changes in the ...
more and less educated workers, using compulsory atten- dance and child labor laws as ...
two-stage least squares estimates of the long-run elasticity of substitution, controlling for ...

[PDF][PDF] Aggregate production functions: some CES experiments

FM Fisher, RM Solow, JM Kearl - The Review of Economic Studies, 1977 - JSTOR
... adjustments were only required in Cases D and G. The series for total labour was generated
in ... of 11, the runs differ according to the relative growth rates of the capital stocks of ... calculated
aggregate elasticity of substitution with the range of firms' elasticities of substitution, or with ...

Industrial efficiency and biased technical change in American and British manufacturing: the case of textiles in the nineteenth century

E Asher - The Journal of Economic History, 1972 - Cambridge Univ Press
... sectors.13 Our resulting estimates did not generally confirm the hypothesis of a constant unitary
elasticity of substitution, namely, the ... Appendix A. Now our composite index of capital (K), is ... o 1
2 In addition, let us postulate that L= axLa where L is our aggregate index of labor; (L1 ...

[PDF][PDF] Optimal" induced" technical change

MI Kamien, NL Schwartz - Econometrica: Journal of the Econometric Society, 1968 - JSTOR
... Enlargement of the elasticity of substitution results in an increase in output from every combination
of factors except that for which the capital labor ratio is equal to one. ... we have the rate of change
in slope with respect to modification in the elasticity of substitution ...

[PDF][PDF] Soviet postwar economic growth and capital-labor substitution: comment

TK Kumar, E Asher - The American Economic Review, 1974 - JSTOR
... In doing so he specified the fol- lowing Constant Elasticity of Substitution (CES) production function
with disembodied Hicks ... 1 and 2 mav be consistent with a CES production structure with ... ML
Weitzman, "Soviet Postwar Economic Growth and Capital Labor Substitution," Amer. ...

Endogenous aggregate elasticity of substitution

K Miyagiwa, C Papageorgiou - Journal of Economic Dynamics and Control, 2007 - Elsevier
... c) the greater the inter-commodity substitution by consumers, and (d) the greater the technological
innovation that enhances intra-sectoral and inter-commodity substitution. ... As mentioned in the
Introduction, AES depends on endowments of capital and labor and their ...

[PDF][PDF] Tax policy and investment behavior: Comment

R Eisner - The American Economic Review, 1969 - JSTOR
... Stud., Apr. 1967, 34, 201-18. 14. H. UZAWA, "Production Functions with Constant Elasticities
of Substitution," Rev. Econ. Stud., Oct. 1962, 29, 291-99. ... Again the estimated elasticity of capital
stock with respect to cost deflated output is inappropriately low, equaling .2970. ...

Does the aggregate production function imply anything about the laws of production? A note on the Simon and Shaikh critiques

JSL McCombie - Applied economics, 1987 - Taylor & Francis
... success of the aggregate production function is due to the relative constancy of labor's share'
(Fisher ... analysis where the analysis has to be solely in terms of the effect of capital-labour
substitution. ... However, this is only correct if the value of the price elasticity is inferred from the ...

[PDF][PDF] Capital and labor in production: some direct estimates

R Eisner - The Theory and Empirical Analysis of Production, 1967 -
... J. Arrow, HB Chenery, BS Minhas, and RM Solow, "Capital-Labor Substitution and Economic
Efficiency ... As before, the contribution of the capital and labor variables is generally less in ... 62, as
a Function of Logarithms of Utilization of Capacity, Capital Expenditures, Depreciation ...

[PDF][PDF] Economic growth and factor substitution: What happened to the Yugoslav miracle?

A Sapir - The economic journal, 1980 - JSTOR
... Indeed, the capital and labour series used ... the bottom part of Table 4. On the whole they
corroborate our previous findings, and in particular they confirm that the elasticity of substitution
is significantly less than one, and also that there is no significant difference between the ...

Production function analysis and market adjustments: An application to the Pacific Northwest forest products industry

DE Merrifield, RW Haynes - Forest science, 1983 -
... 975. Substitution among capital labor, and natural resource products in American
manufacturing. ... Hilgardia 38:132 p. MORONEY, Jg 1970. Identification and specification
analysis ofalternative equations for estimating the elasticity of substitution. ...

Human capital formation and business cycle persistence

R Perli, P Sakellaris - Journal of Monetary Economics, 1998 - Elsevier
... 18 We set ?=-1, which implies a value of 0.5 for the elasticity of substitution. We set b=0.5
so that in the steady state the share of skilled labor (s 2 h 2 ) in total labor in the human capital
sector is 50%. We now turn to specifying the rest of the parameters. ...

Create alert

"capital" ("labor" OR "labour") "substitution" "elasticity" (CES OR "constant elasticity of substitution") production function first order ratio estimate regression empirical econometric Cobb-Douglas labor capital substitution elasticity - Google Scholar