Labour-augmenting technical change data for alternative elasticities of substitution: growth, slowdown, and distribution dynamics

Ziesemer, Thomas

doi:10.1080/10438599.2021.1956316

Cited by 10 publications

(6 citation statements)

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“…Consistent with the results in Section 3.2, we hypothesize that, in line with recent empirical evidence, the elasticity of substitution has increased (Kemnitz and Knoblach, 2020;Ziesemer, 2021).…”

Section: The Change In the Elasticity Of Substitutionsupporting

confidence: 87%

“…When the capital abundance is sufficiently large, an increase in the elasticity of substitution between capital and labour is consistent with a capital-biased direction of technological change (Zuleta, 2016). Indeed, our results are in line with recent empirical contributions that show an increase in the elasticity of substitution over recent decades Ziesemer, 2021).…”

Section: Introductionsupporting

confidence: 92%

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Essays on technological change and income distribution

Pialli¹

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published version features the final layout of the paper including the volume, issue and page numbers. Link to publication General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.• Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain CONTENTS Acknowledgments i Summary iii Chapter 1. Introduction References Chapter 2. The labour-biased direction of technological change across European regional labour markets 2.1. Introduction 2.2. Theoretical background 2.2.1. Related literature 2.2.2. Interpretative framework 2.3. Empirical model 2.3.1. Econometric model 2.3.2. Data description 2.4. Empirical evidence 2.4.1. Descriptive evidence 2.4.2. Baseline results 2.4.3. Additional results 2.5. Conclusions References Appendix A Chapter 3. The increase in the elasticity of substitution between capital and labour: a cross-country investigation 3.1. Introduction 3.2. Theoretical model and a test on the constant elasticity of substitution assumption 3.2.1. Theoretical background 3.2.2. Theoretical model 3.2.3. Econometric evidence 3.3. The change in the elasticity of substitution 3.4. Conclusions and suggestions for further research References Appendix B Chapter 4. The rise in knowledge-intensive services and wage inequality 4.1. Introduction 4.2. Theoretical framework 4.2.1. The transition to the knowledge and service economy 4.2.2. Increasing returns to talent in the knowledge and service economy -A heuristic model 4.3. Data and econometric model 4.3.1. Descriptive evidence 4.3.2. Econometric models 4.4. Results 4.4.1. Main results 4.4.2. Inequality within non-routine cognitive occupations 4.5. Conclusions References Appendix C Chapter 5. Conclusion References Valorisation Addendum About the author Chapter 1.new technologies that increased wage inequality between skilled and unskilled workers (Berman, Bound and Machin, 1998;. The SBTC hypothesis, at the beginning of the 21 st century, was complemented by the Routine-Biased Technological Change (RBTC), which focused on the effects of the systematic use of new ICT technologies, complementing non-routine tasks, in creating polarization of the labour markets (Autor and Dorn, 2013;Autor, .The close timely correlation between the observed decline of the labour share and the emergence of the skill-biased technological change has prompted the collective hypothesis that the capital-intensive direction of technological change is also skilled-biased. However, the SBTC hypothesis does not clarify whether the skill-intensive direction of technological change is labour-or capital-biased. The empirical literature has emphasized for long the capital-and skilledbias direction of techno...

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Section: The Change In the Elasticity Of Substitutionsupporting

confidence: 87%

Section: Introductionsupporting

confidence: 92%

Essays on technological change and income distribution

Pialli¹

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“…Y is domestic GDP in constant local currency units. K d is a capital stock calculated by the perpetual inventory method from GFCFmach defined above using a depreciation rate of 4.2547 percent, the average from PWT 9 for the period 1989-2017, and, to make initial capital stocks, an initial growth rate of 0.047 taken from Ziesemer (2022a).…”

Section: Data and Definition Of Variablesmentioning

confidence: 99%

“…Th099 is the labour augmenting technology level calculated for an elasticity of substitution of 0.99 in Ziesemer (2022a) with human capital in the production function.…”

Section: Data and Definition Of Variablesmentioning

confidence: 99%

“…Growth accounting found a strong role for the productivity residual first in Cobb-Douglas functions (Tinbergen 1942;Solow 1957, Fagerberg 1994 and recently in more general CES functions (Ziesemer 2022a). Therefore, the neoclassical growth model of Solow (1956) has taken over the role of the leading growth model from Harrod-Domar, and technical change is seen as the leading driver of closed-economy growth.…”

Section: Introductionmentioning

confidence: 99%

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Semi-endogenous growth in a non-Walrasian DSEM for Brazil: estimation and simulation of changes in foreign income, human capital, R&D, and terms of trade

Ziesemer

2022

Econ Change Restruct

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In an empirical, dynamic simultaneous equation model (DSEM) for Brazil with 22 equations and variables, we show that foreign income is a driver of economic growth besides semi-endogenous technical change. With a balance-of-payments constraint and endogenous terms of trade, the major mechanism is (i) world GDP driving exports, (ii) exports paying for imported capital goods, which (iii) enter a production function increasing output and the foreign-debt/GDP ratio and (iv) increase the endogenous labour force, and (v) slightly reduce human capital growth. The savings gap drives foreign debt and interest rates up and make the model unstable. Permanent increases of human capital increase the R&D/GDP ratio, labour-augmenting productivity, and GDP. A policy to increase the R&D/GDP ratio leads to more human capital, labour productivity and GDP levels. Both knowledge policies reduce the debt/GDP ratio. A lasting shock on the terms of trade reveals that there is no Harberger–Laursen–Metzler effect. The results hold in the presence of endogenous terms of trade, foreign debt, net foreign income, and net current transfers from abroad, and non-Walrasian (dis-)equilibrium variables: inflation and changing inventories for the goods market, and unemployment in the labour market. Policy should strengthen the weak link from R&D (research and development) to technical change and make education more attractive.

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Internal rates of return for public R&D from VECM estimates for 17 OECD Countries

Ziesemer

2024

Econ Change Restruct

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Public R&D stimulates domestic private and foreign private and public R&D, together enhancing technical change and thereby GDP. In this paper, we evaluate vector-error-correction model (VECM) estimations and simulations of a companion paper in regard to internal rates of return (and related aspects) to additional public R&D of OECD countries and compare them to the macroeconomic literature. We show (i) internal rates of return to public R&D shocks, and (ii) the related payback periods, gain/GDP ratios, and sums of discounted (at 4%) gains. Fourteen of 17 countries show high internal rates of return, short payback periods, and high gains/GDP ratios from positive public R&D shocks if projects are stopped when gains get negative. Three countries show crowding-out effects and require (initial) reductions of public R&D before showing positive results.

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Labour-augmenting technical change data for alternative elasticities of substitution: growth, slowdown, and distribution dynamics

Cited by 10 publications

References 60 publications

Essays on technological change and income distribution

Essays on technological change and income distribution

Semi-endogenous growth in a non-Walrasian DSEM for Brazil: estimation and simulation of changes in foreign income, human capital, R&D, and terms of trade

Internal rates of return for public R&D from VECM estimates for 17 OECD Countries

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