This paper reviews the status quo of the empirical and theoretical literature on the determinants of the elasticity of substitution between capital and labor. Our focus is on the two-input constant elasticity of substitution (CES) production function. By example of the U.S., we highlight the...

This paper provides the first comprehensive review of the empirical and theoretical literature on the determinants of the elasticity of substitution between capital and labor. Our focus is on the two-input constant elasticity of substitution (CES) production function. By example of the U.S., we...

This paper lays out a replication plan for the influential paper by Klump et al. (Factor Substitution and Factor-augmenting Technical Progress in the United States: a Normalized Supply-side System Approach 2007) on using a normalized CES supply-side system approach to estimate the value of the...

Purpose This paper aims to test the hypothesis that the effect of production slowdown on labour demand can be muted by labour hoarding. Design/methodology/approach This study adopts a production function approach, using data from Malta, a small state in the EU. Findings The results confirm the...

This paper lays out a replication plan for the influential paper by Klump et al. (Factor Substitution and Factor-augmenting Technical Progress in the United States: a Normalized Supply-side System Approach, Review of Economics and Statistics, 2007) on using a normalized CES supply-side system...

The elasticity of factor substitution between capital and labor is a crucial parameter in many economic fields. However, despite extensive research, there is no agreement on its value. Utilizing 738 estimates from 41 studies published between 1961 and 2016, this paper provides the first...

This paper addresses the relationship between technical change and the elasticity of substitution between factors of production. It is shown how the elasticity within a CES production setting can change due to technical change. Technical change is interpreted in the spirit of horizontal...

We analyse the effects of a government spending expansion in a DSGE model with Mortensen-Pissarides labour market frictions, deep habits in private and public consumption, investment adjustment costs, a constant-elasticity-of-substitution (CES) production function, and adjustments in employment...

This paper assesses the importance for structural transformation of three features of sectoral technology: labor-augmenting technological progress, capital intensity, and substitutability between capital and labor. We estimate CES production functions for agriculture, manufacturing, and services...

Feenstra and Ma (2008) develop a monopolistic competition model where firms choose their optimal product scope by balancing the profits from a new variety against the costs of "cannibalizing" sales of existing varieties. While more productive firms always have a higher market share, there is no...

Capital-labor substitution and TFP estimates are essential features of many economic models. Such models typically embody a balanced growth path. This often leads researchers to estimate models imposing stringent prior choices on technical change. We demonstrate that estimation of the...