JSTOR Daily

The Substitution Elasticity, Factor Shares, and the Low-Frequency Panel Model

The value of the elasticity of substitution between labor and capital (σ) is a crucial assumption in understanding the secular decline in the labor share of income. This paper develops and implements ...
International Monetary Fund

The Elasticity of Substitution Between Skilled and Unskilled Labor in Developing Countries: A Directed Technical Change Perspective

Download PDF More Formats on IMF eLibrary Order a Print Copy Create Citation We develop a model of endogenous skill-biased technical change in developing countries. The endogenous response to a rise ...
San Francisco Fed

Capital-Labor Substitution and Equilibrium Indeterminacy

Empirical evidence indicates that the elasticity of capital-labor substitution for the aggregate U.S. economy is below unity. In contrast, the existing indeterminacy literature has mostly restricted ...
International Monetary Fund

On the Substitution of Private and Public Capital in Production

Download PDF More Formats on IMF eLibrary Order a Print Copy Create Citation Most macroeconomic models assume that aggregate output is generated by a specification for the production function with ...
San Francisco Fed

Sticker Shocks: Using VAT Changes to Estimate Upper-Level Elasticities of Substitution

We estimate the upper-level elasticity of substitution between goods and services of a nested aggregate CES preference specification. We show how this elasticity can be derived from the long-run ...
Investopedia

Income Elasticity of Demand: Definition, Formula, and Types

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...