EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:
Title:[Sigma]: the long and short of it PDF Logo
Authors:Chirinko, Robert S.
Issue Date:2008
Series/Report no.:CESifo working paper 2234
Abstract:Research on the elasticity of substitution between capital and labor – ó – has been proceeding for 75 years. While there is clearly a strong case for the importance of ó in the analysis of growth and other economic issues, much less agreement exists on the value of ó. This paper offers some perspectives on prior estimates of ó, emphasizing the fundamental tension between the short-run data that are available and the long-run parameter that is required. Estimates of ó based on various short-run and long-run models are discussed and, while the estimates range widely, the weight of the evidence suggests a value of ó in the range of 0.40 to 0.60. There is little evidence to sustain the assumption of a Cobb-Douglas production function.
capital formation
economic growth
estimating long-run relations
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
559091710.PDF264.21 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.