Calibration of normalised CES production functions in dynamic models

Normalising CES production functions in the calibration of basic dynamic models allows to choose technology parameters in an economically plausible way. When variations in the elasticity of substitution are considered, normalisation is necessary in order to exclude arbitrary effects. As an illustration, the effect of the elasticity of substitution on the speed of convergence in the Ramsey model is computed with different normalisations.

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Year of publication:	2006
Authors:	Klump, Rainer ; Saam, Marianne
Publisher:	Mannheim : Zentrum für Europäische Wirtschaftsforschung (ZEW)
Subject:	CES production functions \| normalisation \| calibration \| Ramsey model

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Series:	ZEW Discussion Papers ; 06-078
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	521036666 [GVK] hdl:10419/24533 [Handle] RePEc:zbw:zewdip:5471 [RePEc]
Classification:	E27 - Forecasting and Simulation ; E24 - Employment; Unemployment; Wages ; O41 - One, Two, and Multisector Growth Models
Source:	EconStor

Persistent link: https://www.econbiz.de/10010297849