The degree of substitutability between clean and dirty energy plays a centralrole in leading economic analyses of optimal environmental policy. Despitethe importance, assuming a constant and exogenous elasticity of substitutionhas been a dominant theoretical approach. We challenge this...

I estimate CES aggregate production functions for the US, the UK, Japan, Germany, and Spain using data from the EU KLEMS database. I distinguish between three types of capital: information and communication technologies (ICT), intellectual property (IP) capital, and traditional capital. I assume...

The relationship between a declining labor income share and a falling relative price of capital requires capital and labor to be gross substitutes at the aggregate level (i.e., σ-Agg1). We argue that this restriction can be relaxed if we distinguish labor by skills and identify differential...