How are substitution in the spatial and in the temporal sense connected? Can estimates based on data with spatial variation be transmitted into values appropriate for exploring temporal variation, and vice versa? This paper, building on, inter alia, Frisch (1959), attempts to give some...

This paper extends the analysis of Junge and Kugler (2013) on the effects of increased capital requirements on Swiss GDP and obtains the following main results: First the Modigliani-Miller effect is robust with respect to a substantial extension of the data base and yields an offset of capital...

The elasticity of substitution between capital and labor (σ) is usually considered a "deep parameter". This paper shows, in contrast, that σ is affected by both globalization and technology, and that different intensities in these drivers have different consequences for the OECD and the...

The non-constancy of factor shares is drawing the attention of many researchers. We document an average drop of the labour share of 8 percentage points for eight European countries and the US between 1980 and 2007. We investigate theoretically and empirically two mechanisms: the substitution...

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...

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...

We provide a general theoretical characterization of how firms' technology choice on a technology frontier determines the long-run elasticity of substitution between capital and labor. We show that the shape of the frontier determines factor shares and the elasticity of substitution between...

The penetration of Variable Renewable Energies (VREs) in the electricity mix poses serious challenges in terms of management of the electrical grids, as the associated variability and non-dispatchability are in contrast with the requirement that the load be instantaneously equalized by the...

This paper evaluates the presence of heterogeneity, by household type, in the elasticity of substitution between food expenditures and time and in the goods intensity parameter in the household food and eating production functions. We use a synthetic dataset constructed by statistically matching...

We provide a general theoretical characterization of how technology choice affects the long-run elasticity of substitution between capital and labour. While the shape of the technology frontier determines the long-run growth path and the long-run elasticity, adjustment costs in technology choice...

This paper uses normalized constant elasticity of substitution production functions to estimate the elasticity of substitution and labour-augmenting technical change in South Africa over the period 1994-2012. We find elasticities of 0.6-0.9 and positive labour-augmenting technical change, which...

The objective of this paper is to estimate transformation and Armington substitution elasticities for South African trade. We use linear methods to estimate elasticities without growth factors. We then employ a non-linear system of equations to estimate Armington import elasticities and related...

In this paper, we undertake an in-depth inquiry into the nature of sharing externalities, and study how they affect the market outcome. We show that the key thing for understanding sharing externalities is the interplay between two forces: the specialization/complexity effect, on the one hand,...

The specification of parameters is a crucial task in the development of economic models. The objective of this paper is to improve the standard parameter specification of computable general equilibrium (CGE) models. On that account, we illustrate how Optimal Fingerprint Detection Methods (OFDM)...

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...

The paper analyzes resource policies in an economy in which renewable and fossil resources are realistically assumed to be essential inputs to production. Also realistically, the two types of resources are imperfect substitutes whose degree of substitutability can, however, increase over time....

Recently Acemolgu, Aghion, Bursztyn and Hemous (AER 2012) formulated a model in which a high macroeconomic elasticity of substitution between clean and dirty production represents a crucial condition for green growth. Until now it has never been systematically estimated. Using a novel panel of...