Factor Substitution and Factor Augmenting Technical Progress in the Us: A Normalized Supply-Side System Approach
By R. Klump, Peter Mcadam, Alpo Willman. Social Science Research Network, 2004
153 citations recorded by the source corpus.
Using a normalized CES function with factor-augmenting technical progress, we estimate a supply-side system of the US economy from 1953 to 1998. Avoiding potential estimation biases that have occurred in earlier studies and putting a high emphasis on the consistency of the data set, required by the estimated system, we obtain robust results not only for the aggregate elasticity of substitution but also for the parameters of labor and capital augmenting technical change. We find that the elasticity of substitution is significantly below unity and that the growth rates of technical progress show an asymmetrical pattern where the growth of labor-augmenting technical progress is exponential, while that of capital is hyperbolic or logarithmic.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/36d57b5ecc90363f465d82048423ba711f199f43
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
Citations in the corpus
- Getting Normalization Right: Dealing with ‘Dimensional Constants’ in Macroeconomics (2012, background): “Seven equations (8)–(14) describe and equilibrium in seven real variables {Λt}, {Ct}, {Nt}, {Rt}, {Wt}, {Yt} and {Kt} given exogenous pro(10)This is neatly demonstrated in Klump et al. (2011) in an example where different values of C and α can be generated simply by changing the units of capital - s”
- The Normalized CES Production Function: Theory and Empirics (2011, unknown): “Indeed, there is now mounting empirical evidence that aggregate production is better characterized by a non-unitary elasticity of substitution (rather than unitary or above unitary), e.g., Chirinko et al. (1999), Klump et al. (2007a), León-Ledesma et al. (2010a).”
- Understanding labour income share dynamics in Europe (2009, background): “The paths for capital and labour-augmenting technical progress are consistent with Klump et al. (2007) (see Table 4 in p.”
- Micro Data and Macro Technology (2012, unknown): “Since Levhari (1968), it has been well known that Houthakker’s result of a unitary elasticity of substitu(4)Although Berndt (1976) found a unitary elasticity of substitution in the US time series assuming neutral technical change, Antras (2004) and Klump et al. (2007) subsequently found estimates fr”
- Recent Declines in Labor's Share in US Income: A Preliminary Neoclassical Account (2015, methodology): “Klump et al. (2007) use normalized production functions as recommended by Klump and De La Grandville (2000). They also allow for more complex functional forms for factor augmenting technical change that can accommodate exponential, logarithmic, and hyperbolic growth as special cases. Their estimatio”