Long-run relationships between labor and capital: Indirect evidence on the elasticity of substitution

Juselius, Mikael

doi:10.1016/j.jmacro.2007.08.016

Cited by 10 publications

(4 citation statements)

References 32 publications

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“…The DICE model uses a Cobb-Douglas production function where the elasticity of substitution between labor and capital equals one. Recent works have criticized the use of the Cobb-Douglas function, and provide empirical evidence that the elasticity of substitution between labor and capital is substantially lower than one (Antras 2004;Chirinko 2008;Juselius 2008;Smith 2008;Chirinko and Mallick 2017). Using a substitution elasticity smaller than one will have three major implications: First, it allows studying the differential impact of factor-specific climate damages on production.…”

Section: The Numerical Modelmentioning

confidence: 99%

Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling

Piontek

Kalkuhl

Kriegler

et al. 2018

Environ Resource Econ

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Despite increasing empirical evidence of strong links between climate and economic growth, there is no established model to describe the dynamics of how different types of climate shocks affect growth patterns. Here we present the first comprehensive, comparative analysis of the long-term dynamics of one-time, temporary climate shocks on production factors, and factor productivity, respectively, in a Ramsey-type growth model. Damages acting directly on production factors allow us to study dynamic effects on factor allocation, savings and economic growth. We find that the persistence of impacts on economic activity is smallest for climate shocks directly impacting output, and successively increases for direct damages on capital, loss of labor and productivity shocks, related to different responses in savings rates and factor-specific growth. Recurring shocks lead to large welfare effects and long-term growth effects, directly linked to the persistence of individual shocks. Endogenous savings and shock anticipation both have adaptive effects but do not eliminate differences between impact channels or significantly lower the dissipation time. Accounting for endogenous growth mechanisms increases the effects. We also find strong effects on income shares, important for distributional implications. This work fosters conceptual understanding of impact dynamics in growth models, opening options for links to empirics.

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Section: The Numerical Modelmentioning

confidence: 99%

Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling

Piontek

Kalkuhl

Kriegler

et al. 2018

Environ Resource Econ

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show abstract

“…While many macro models assume a Cobb-Douglas production function, recent research based on more disaggregated data (e.g. Antras, 2004, Juselius, 2008 has shown that the elasticity of substitution between capital and labor is less than 1, i.e. ߜ < 0 in the model above.…”

Section: Discussionmentioning

confidence: 99%

HIV, wages, and the skill premium

Marinescu¹

2014

Journal of Health Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

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“…Cobb-Douglas production function, recent research based on more disaggregated data (e.g. Antras, 2004, Juselius, 2008 has shown that the elasticity of substitution between capital and labor is less than 1, i.e. ߜ < 0 in the model above.…”

Section: Discussionmentioning

confidence: 99%

HIV, Wages, and the Skill Premium

Marinescu

2012

SSRN Journal

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Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions.The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public.IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

show abstract

Long-run relationships between labor and capital: Indirect evidence on the elasticity of substitution

Cited by 10 publications

References 32 publications

Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling

Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling

HIV, wages, and the skill premium

HIV, Wages, and the Skill Premium

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