Download or read book The Elasticity of Factor Substitution Between Capital and Labor in the U S Economy A Meta Regression Analysis written by Michael Knoblach and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Elasticity of Substitution Between Capital and Labour in the Us Economy written by Michael Knoblach and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite extensive research, there is no agreement on the value of the elasticity of substitution between capital and labour at the aggregate or the industrial level. Utilizing 2,419 estimates from 77 studies published between 1961 and 2017, this paper provides the first meta-regression analysis for the US economy. We show that the heterogeneity in previously reported estimates is driven primarily by modelling decisions for technological dynamics. Throughout the analysis, the hypothesis of a Cobb-Douglas production function is rejected. Based on our meta-regression sample, we estimate a long-run meta-elasticity for the aggregate economy in the range of 0.45-0.87. Most industrial estimates do not deviate significantly from the estimate for the aggregate economy.
Download or read book Capital Energy Substitution and Shifts in Factor Demand written by Mark J. Koetse and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents results of a meta-regression analysis on empirical estimates of capital-energy substitution. Theoretically it is clear that a distinction should be made between Morishima substitution elasticities and cross-price elasticities. The former represent purely technical substitution possibilities while the latter include an income effect and therefore represent economic substitution potential. We estimate a meta-regression model with separate coefficients for the two elasticity samples. Our findings suggest that primary model assumptions on returns to scale, technological change and separability of input factors matter for the outcome of a primary study. Aggregation of variables and the type of data used in empirical research are also relevant sources of systematic effect-size variation. Taking these factors into consideration, we compute ideal-typical elasticities for the short, medium and long run. The resulting figures clearly show that substitution elasticities are substantially higher than cross price elasticities. Therefore, despite considerable technical opportunities for capital-energy substitution, they are almost entirely outweighed by the negative income effect brought about by energy price increases; the short and medium run cross price elasticities are not statistically different from zero. In the long run this pattern does not hold. Our findings therefore suggest that actual changes in the demand for capital due to energy price increases take time.
Download or read book Production Technology Market Power and the Decline of the Labor Share written by Agustin Velasquez and published by International Monetary Fund. This book was released on 2023-02-10 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The labor share has been declining in the United States, and especially so in manufacturing. This paper investigates the role of capital accumulation and market power in explaining this decline. I first estimate the production function of 21 manufacturing sectors along time series and including time-varying markups. The elasticities of substitution for most sectors are estimated below one, implying that capital deepening cannot explain the labor share decline. I then track the long-run evolution of the labor share using the estimated production technology parameters. I decompose aggregate labor share changes into sector re-weights, capital-labor substitution, and market power effects. I find that the increase in market power, as reported in recent studies, can account for, at least, 76 percent of the labor share decline in manufacturing. Absent the rise in market power, the labor share would have remained constant in the second half of the 20th century.
Download or read book Sectoral elasticities of substitution between capital and labor in a developing economy written by Jere R. Behrman and published by . This book was released on 1970 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Algorithms and Solutions Based on Computer Technology written by Carlos Jahn and published by Springer Nature. This book was released on 2022-05-03 with total page 393 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a collection of papers compiled from the conference "Algorithms and Computer-Based Solutions" held on June 8-9, 2021 at Peter the Great St. Petersburg Polytechnic University (SPbPU), St. Petersburg, Russia. The authors of the book are leading scientists from Russia, Germany, Netherlands, Greece, Hungary, Kazakhstan, Portugal, and Poland. The reader finds in the book information from experts on the most interesting trends in digitalization - issues of development and implementation of algorithms, IT and digital solutions for various areas of economy and science, prospects for supercomputers and exo-intelligent platforms; applied computer technologies in digital production, healthcare and biomedical systems, digital medicine, logistics and management; digital technologies for visualization and prototyping of physical objects. The book helps the reader to increase his or her expertise in the field of computer technologies discussed.
Download or read book Interaction and Substitution Between Capital Labor and Energy in the US Economy written by Cassandra C. Copeland and published by . This book was released on 2016 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Estimates of price substitution among capital, labor, and energy are critical to numerous policy issues. Estimating factor share equations of the translog production function requires constant returns to scale and competitive factor markets. The present estimates find mixed evidence on these assumptions starting with log linear production and parsimoniously adding interaction terms. Data cover US output from 1949 to 2013 with inputs of fixed capital assets, the labor force, and Btu energy input. Energy interaction and proves critical revealing declining productivity of overpaid labor. Underpaid capital and energy are weak substitutes if at all. Labor has the strongest own price substitution.
Download or read book TURKISH ECONOMIC ASSOCIATION INTERNATIONAL CONFERENCE ON ECONOMICS ICE TEA 2018 written by Ercan Uygur and published by Türkiye Ekonomi Kurumu. This book was released on 2018-12-31 with total page 2118 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Capitalism at a Crossroads written by Ali Ari and published by Springer Nature. This book was released on 2023-02-25 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the current capitalist system has been increasingly struggling to respond to the problems and uncertainties in the global economy, this book aims to identify the main economic, social, and ecological problems and discusses solutions for a more inclusive and sustainable economic system. Written by an international selection of contributors, it takes a wider perspective beyond classical orthodox economics. By doing so, this book covers a wide range of topics, such as global warming and climate change, food and energy scarcity, rising inequality and debt issues, health, ecological, economic, and political crises, degrowth, green new deals, solidarity, economy, artificial intelligence, technological change, smart solutions, and smart cities. Discussing these topics, the book presents answers to the question of whether the current capitalist system is viable and provides suggestions for a fair, inclusive, and modern economic system. Taking a comprehensive approach, the book will appeal to students, scholars, and researchers of heterodox and alternative economics.
Download or read book Labor Costs and Corporate Investment in Italy written by Daniel Garcia-Macia and published by International Monetary Fund. This book was released on 2020-02-21 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recovery of private investment in Italy has lagged its euro area peers over the past decade. This paper examines the role of elevated labor costs in hindering the recovery. Specifically, labor costs rose faster than labor productivity prior to the global financial crisis and have remained high since, weighing on firms’ profits, capital returns, and thus capacity to invest. Empirical analysis provides evidence for the impact of wages on investment at the sectoral and firm levels. Sectoral wage growth seems unrelated to sectoral productivity growth, but is negatively associated with investment. Firm-level data permit a better identification—by exploiting the interaction between sectoral wage growth (exogenous to the firm) and the lagged labor share of the firm. A 1 percent increase in real wages is estimated to cause a 1/3 percent fall in fixed capital. Profits absorb only 1⁄2 of the cost increase, pointing to the role of liquidity constraints. These results highlight the need for labor market reform to reinvigorate investment, and thus labor productivity and job creation.
Download or read book Factor Shares the Price Markup and the Elasticity of Substitution Between Capital and Labor written by Xavier Raurich-Puigdevall and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In a Walrasian labor market, the labor income share is constant under the assumptions of a Cobb-Douglas production function and perfect competition. Given the observed decline of the labor share in recent decades, this paper relaxes these assumptions, proposes a time-series calculation of the aggregate price mark-up reflecting the degree of imperfect competition in the product market, and provides estimates of the elasticity of substitution under such product market imperfections. We focus on Spain and the U.S. and show that the elasticity of substitution is above one in Spain and below one in the U.S. We also show that the price markup drives the elasticity of substitution away from one, upwards in Spain, downwards in the U.S. These results are used to explain the declining path of the labor income share, common to both economies, and their contrasted patterns in terms of capital deepening. -- elasticity of substitution ; price markup ; factor shares ; capital deepening
Download or read book Capital Labor Substitution and Equilibrium Indeterminacy written by Jang-Ting Guo and published by . This book was released on 2008 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical evidence indicates that the elasticity of capital-labor substitution for the aggregate U.S. economy is below unity. In contrast, the existing indeterminacy literature has mostly restricted attention to a Cobb-Douglas production function which assumes a higher substitution elasticity than is implied by the data. This short paper examines the quantitative relationship between capital-labor substitution and the conditions needed for equilibrium indeterminacy (and belief-driven fluctuations) in a plausibly-calibrated, one-sector growth model. We find that capital-labor substitution has little quantitative impact on the threshold degree of increasing returns for local indeterminacy. Our results suggest that the Cobb-Douglas specification is a satisfactory approximation for local indeterminacy analysis.
Download or read book Isoelastic Elasticity of Substitution Production Functions written by and published by . This book was released on 2015 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Micro Data and the Macro Elasticity of Substitution written by Ezra Oberfield and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We estimate the aggregate elasticity of substitution between capital and labor in the US manufacturing sector. We show that the aggregate elasticity of substitution can be expressed as a simple function of plant level structural parameters and sufficient statistics of the distribution of plant input cost shares. We then use plant level data from the Census of Manufactures to construct a local elasticity of substitution at various levels of aggregation. Our approach does not assume the existence of a stable aggregate production function, as we build up our estimate from the cross section of plants at a point in time. Accounting for substitution within and across plants, we find that the aggregate elasticity is substantially below unity at approximately 0.7. Lastly we assess the sources of the bias of aggregate technical change from 1987 to 1997. We find that the labor augmenting character of aggregate technical change is due almost exclusively to labor augmenting productivity growth at the plant level rather than relative growth in capital intensive plants.
Download or read book On the Substitution of Private and Public Capital in Production written by Zidong An and published by International Monetary Fund. This book was released on 2019-11-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Measuring Capital labor Substitution written by Sebastian Gechert and published by . This book was released on 2021 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that the large elasticity of substitution between capital and labor estimated in the literature on average, 0.9, can be explained by three issues: publication bias, use of cross-country variation, and omission of the first-order condition for capital. The mean elasticity conditional on the absence of these issues is 0.3. To obtain this result, we collect 3,186 estimates of the elasticity reported in 121 studies, codify 71 variables that reflect the context in which researchers produce their estimates, and address model uncertainty by Bayesian and frequentist model averaging. We employ nonlinear techniques to correct for publication bias, which is responsible for at least half of the overall reduction in the mean elasticity from 0.9 to 0.3. Our findings also suggest that a failure to normalize the production function leads to a substantial upward bias in the estimated elasticity. The weight of evidence accumulated in the empirical literature emphatically rejects the Cobb-Douglas specification.
Download or read book A Decline in Labor s Share with Capital Accumulation and Complementary Factor Inputs written by Saumik Paul and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The role of capital accumulation as a driver of the labor income share requires capital and labor to be substitutes, which appears paradoxical in a world predominantly characterized by complementarity between capital and labor. This paper argues that the composition of skills in the labor force and an identification of the elasticity parameters between capital and different skills of labor can reconcile the opposing views. Using a framework with capital-skill complementarity and variable substitution elasticities, the Morishima elasticity of substitution is applied to identify the elasticity parameters at different skill levels and derive the necessary condition for capital accumulation to coexist with a declining labor income share when capital and labor are complements. Empirical evidence supports this proposition.
