We undertake a sensitivity analysis of the productivity of public capital under the aggregate production function approach. Several proxies are used for the private inputs and for public capital, several dummy variables are included to adjust for energy price shocks, newly revised data is...

This paper analyzes the valorization process in Chile, Japan, Netherlands and United States, estimating advanced constant and variable capital, turnover speed, capital composition and profit rate on total advanced capital. Furthermore, it analyzes the role of turnover speed in the valorization...

This paper examines theoretical and empirical aspects of the employment in Germany from 2000 – 2013. Inspired by Krelle’s (1996) discussion paper relevant German labor market data are traced and it is analyzed to which extend some theoretical employment considerations and labor market reform...

We construct an endogenous growth model of directed technical change with automation (the introduction of machines which replace low-skill labor and complement high-skill labor) and horizontal innovation (the introduction of new products, which increases demand for both types of labor). Such an...

Abstract. We put forward a tractable, interpretable, and easily generalizable framework for modeling endogeneous factor-augmenting technology choice by monopolistically competitive firms. The setup is framed within the standard Dixit and Stiglitz (1977) model of monopolistic competition. Optimal...

Growth accounting exercises point to aggregate TFP differences as the dominant source of the large cross-country income differences. In this paper, I ask which sectors account for the aggregate TFP gap between rich and poor countries. Data limitations for developing countries have led...

We derive the aggregate normalized CES production function from idea-based microfoundations where firms are allowed to choose their capital- and labor-augmenting technology optimally from a menu of available technologies. This menu is in turn augmented through factor-specific R&D. The considered...

This paper presents a theory of how factor income shares are determined in an environment with labor market frictions and heterogeneous firms. I assume neither a specific aggregate production function nor competitive factor markets. Instead, I first develop microfoundations for an aggregate...

The response of hours to technology shocks is a key controversy in macroeconomics. We show that differences between RBC and NK models hinge on highly restrictive views of technology. We introduce CES production technologies and demonstrate that the response of hours depends on the...

Based on a tractable “endogeneous technology choice” framework, we provide a microfoundation for aggregate normalized constant elasticity of substitution (CES) production functions with non-neutral, factor-augmenting technical change. In this framework, firms are allowed to choose unit...