Elasticity of substitution and biased technical change in the CES production function for China's metal-intensive industries

2021 ◽  
Vol 73 ◽  
pp. 102216
Author(s):  
Xuehong Zhu ◽  
Anqi Zeng ◽  
Meirui Zhong ◽  
Jianbai Huang
Keyword(s):  
Production Function ◽  
Technical Change ◽  
Elasticity Of Substitution

scholarly journals Local and Global Dynamics in a Discrete Time Growth Model with Nonconcave Production Function

2012 ◽  
Vol 2012 ◽  
pp. 1-22 ◽  
Author(s):  
Serena Brianzoni ◽  
Cristiana Mammana ◽  
Elisabetta Michetti
Keyword(s):  
Production Function ◽  
Growth Model ◽  
Discrete Time ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Global Dynamics ◽  
Production Factors ◽  
Local And Global Dynamics ◽  
Complex Features

We study the dynamics shown by the discrete time neoclassical one-sector growth model with differential savings while assuming a nonconcave production function. We prove that complex features exhibited are related both to the structure of the coexixting attractors and to their basins. We also show that complexity emerges if the elasticity of substitution between production factors is low enough and shareholders save more than workers, confirming the results obtained while considering concave production functions.

scholarly journals On the Substitution of Private and Public Capital in Production

2019 ◽  
Vol 19 (232) ◽  
Author(s):  
Zidong An ◽  
Alvar Kangur ◽  
Chris Papageorgiou
Keyword(s):  
Production Function ◽  
Public Capital ◽  
Physical Capital ◽  
Elasticity Of Substitution ◽  
Point Estimate ◽  
Private Capital ◽  
Public And Private ◽  
Macroeconomic Models ◽  
Private And Public ◽  
Penn World Table

Most macroeconomic models assume that aggregate output is generated by a specification for the production function with total physical capital as a key input. Implicitly this assumes that private and public capital stocks are perfect substitutes. In this paper we test this assumption by estimating a nested-CES production function whereas the two types of capital are considered separately along with labor as inputs. The estimation is based on our newly developed dataset on public and private capital stocks for 151 countries over a period of 1960-2014 consistent with Penn World Table version 9. We find evidence against perfect substitutability between public and private capital, especially for emerging and LIDCs, with the point estimate of the elasticity of substitution estimated closely around 3.

scholarly journals Why Has Urban Inequality Increased?

2018 ◽  
Vol 10 (4) ◽  
pp. 1-42 ◽  
Author(s):  
Nathaniel Baum-Snow ◽  
Matthew Freedman ◽  
Ronni Pavan
Keyword(s):  
Production Function ◽  
Wage Inequality ◽  
Strong Evidence ◽  
Technical Change ◽  
Agglomeration Economies ◽  
Unskilled Labor ◽  
Skill Bias ◽  
Urban Inequality

This paper examines mechanisms driving the more rapid increases in wage inequality in larger cities between 1980 and 2007. Production function estimates indicate strong evidence of capital–skill complementarity and increases in the skill bias of agglomeration economies in the context of rapid skill-biased technical change. Immigration shocks are the source of identifying variation across cities in changes to the relative supply of skilled versus unskilled labor. Estimates indicate that changes in the factor biases of agglomeration economies rationalize at least 80 percent of the more rapid increases in wage inequality in larger cities. (JEL J24, J31, O33, R23)

scholarly journals BIASED TECHNICAL CHANGE, INTERMEDIATE GOODS, AND TOTAL FACTOR PRODUCTIVITY

2011 ◽  
Vol 16 (2) ◽  
pp. 184-203 ◽  
Author(s):  
Alessio Moro
Keyword(s):  
Total Factor Productivity ◽  
Production Function ◽  
Technical Change ◽  
Value Added ◽  
Intermediate Goods ◽  
Factor Productivity ◽  
Aggregate Production ◽  
Tfp Growth ◽  
Aggregate Production Function ◽  
The Impact

In this paper I show that the intensity at which intermediate goods are used in the production process affects aggregate total factor productivity (TFP). To do this, I construct an input–output model economy in which firms produce gross output by means of a production function in capital, labor, and intermediate goods. This production function is subject, together with the standard neutral technical change, to intermediates-biased technical change. Positive (negative) intermediates-biased technical change implies a decline (increase) in the elasticity of gross output with respect to intermediate goods. In equilibrium, this elasticity appears as an explicit part of TFP in the value added aggregate production function. In particular, when the elasticity of gross output with respect to intermediates increases, aggregate TFP declines. I use the model to quantify the impact of intermediates-biased technical change for measured TFP growth in Italy. The exercise shows that intermediates-biased technical change can account for the productivity slowdown observed in Italy from 1994 to 2004.

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