Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152801
Authors: 
Klump, Rainer
McAdam, Peter
Willman, Alpo
Year of Publication: 
2004
Series/Report no.: 
ECB Working Paper 367
Abstract: 
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 laboraugmenting technical progress is exponential, while that of capital is hyperbolic or logarithmic.
Subjects: 
Capital-Labor Substitution
Factor Shares
Normalized CES function
Supply-side system
Technological Change
United States
JEL: 
C22
E23
E25
O30
O51
Document Type: 
Working Paper

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