Identifying the Elasticity of Substitution with Biased Technical Change

León‐Ledesma, Miguel A.; McAdam, Peter; Willman, Alpo

doi:10.1257/aer.100.4.1330

Cited by 297 publications

(246 citation statements)

References 43 publications

(53 reference statements)

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“…7 The results from banking studies suggest that the technical progress term is much stronger for smaller banks, and we expect that because MFIs are relatively small, this term will be significant (Lang and Welzel, 1996). estimation, especially when combined with normalization, which we do using the price of (physical) capital (León-Ledesma et al, 2010).…”

Section: Estimation Approachmentioning

confidence: 99%

Scale economies and input price elasticities in microfinance institutions

Hartarska

Shen

Mersland

2013

Journal of Banking & Finance

127

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We evaluate the efficiency of microfinance institutions (MFIs) using a structural approach which also captures these institutions' outreach and sustainability objectives. We estimate economies of scale and input price elasticities for lending-only and deposit-mobilizing MFIs using a large sample of high-quality panel data. The results confirm conjectures that improvements in efficiency can come from the growth or consolidations of MFIs, as we find substantial increasing returns to scale for all but profitability-focused deposit-mobilizing MFIs. Our results support the existence of a trade-off between outreach and sustainability. All inputs are inelastic substitutes, but we find differences in own-price elasticities in lending-only and deposit -mobilizing MFIs. JEL classification: G21; F30

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Section: Estimation Approachmentioning

confidence: 99%

Scale economies and input price elasticities in microfinance institutions

Hartarska

Shen

Mersland

2013

Journal of Banking & Finance

127

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“…Estimating the model parameters using (1) alone is theoretically possible due to the nonlinearity of the equation but the coefficients of the time trends will be very poorly identified and better estimates can be obtained by using multiple estimation equations, which provide more information (Leon-Ledesma et al, 2010). We use (1) together with the first order conditions under the assumption of perfect competition in the hiring of inputs to estimate the model parameters.…”

Section: Model and Methodsmentioning

confidence: 99%

“…We use the Newey and West (1987) approach to computing the covariance matrix of the coefficients with five correlated lags. We normalize the values of the inputs, quality factors, output, and the factor augmentation trends to unity in 1900, which is the midpoint of the sample, which greatly aids in finding the optimal parameter estimates (Leon- Ledesma et al, 2010).…”

Section: Model and Methodsmentioning

confidence: 99%

Economic Growth and the Transition from Traditional to Modern Energy in Sweden

Kander

Stern

2013

SSRN Journal

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We examine the role of substitution from traditional to modern energy carriers and of differential rates of innovation in the use of each of these in Sweden from 1850 to 1950. We use a simple growth model with a nested CES production function and exogenous factor augmenting technological change and carry out a growth accounting decomposition based on the econometric results. Energy and energy augmenting technological change contributed more than a third of the economic growth in this period. Even though the rate of technical change was much larger for modern energy, innovation in the use of traditional energy carriers contributed more to growth between 1850 and 1890, since the cost share of traditional energy was so much larger than that of modern energy in that period. However, after 1890 we find that modern energy contributed much more to economic growth than traditional energy, but increasingly labor augmenting technological change and capital accumulation became the most important drivers of growth in the final decades of the period. | T H E A U S T R A L I A N N A T I O N A L U N I V E R S I T Y Keywords JEL ClassificationO13, O41, Q43, N13, N14 Address for correspondence:(E) cama.admin@anu.edu.auThe Centre for Applied Macroeconomic Analysis in the Crawford School of Public Policy has been established to build strong links between professional macroeconomists. It provides a forum for quality macroeconomic research and discussion of policy issues between academia, government and the private sector.The Crawford School of Public Policy is the Australian National University's public policy school, serving and influencing Australia, Asia and the Pacific through advanced policy research, graduate and executive education, and policy impact. | T H E A U S T R A L I A N N A T I O N A L U N I V E R S I T Y AbstractWe examine the role of substitution from traditional to modern energy carriers and of differential rates of innovation in the use of each of these in Sweden from 1850 to 1950. We use a simple growth model with a nested CES production function and exogenous factor augmenting technological change and carry out a growth accounting decomposition based on the econometric results. Energy and energy augmenting technological change contributed more than a third of the economic growth in this period. Even though the rate of technical change was much larger for modern energy, innovation in the use of traditional energy carriers contributed more to growth between 1850 and 1890, since the cost share of traditional energy was so much larger than that of modern energy in that period. However, after 1890 we find that modern energy contributed much more to economic growth than traditional energy, but increasingly labor augmenting technological change and capital accumulation became the most important drivers of growth in the final decades of the period. JEL Codes: O13, O41, Q43, N13, N14 Acknowledgements:We thank the Australian Research Council for support under Discovery grant DP120101088: "Energy Transitions: Pa...

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“…The steady state form of the …rst-order conditions of pro…t maximising …rms and the utility of member households maximising unions imply the 5-equation medium-run supply system that allows a consistent two-step estimation of the underlying deep parameters of the model. As the supply system contains cross-equation parameter constrains, it is estimated with the method of non-linear SUR that León-Ledesma et al (2010) have proven to be a very e¢ cient estimation approach outperforming all single-equation methods. This system de…nes all parameters related to technology, production function and the mark-up, allowing to de…ne optimal frictionless prices, wages, labour input, marginal cost and marginal product concepts needed in estimating in the second stage the dynamic …rst order optimisation conditions of …rms and unions.…”

Section: Ecb Working Paper Series No 1315mentioning

confidence: 99%

“…Therefore we …rst specify the frictionless steady state implied by the dynamic …rst order conditions and the production function. As the Monte Carlo study by León-Ledesma, McAdam and Willman (2010) shows, this o¤ers an e¢ cient way to estimate the central parameters of the medium-run supply side.…”

Section: Ecb Working Paper Series No 1315 April 2011mentioning

confidence: 99%

The ECB's New Multi-Country Model for the euro area: NMCM — Simulated with rational expectations

2012

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Identifying the Elasticity of Substitution with Biased Technical Change

Abstract: 4Non-technical summary 5

Cited by 297 publications

References 43 publications

Scale economies and input price elasticities in microfinance institutions

Scale economies and input price elasticities in microfinance institutions

Economic Growth and the Transition from Traditional to Modern Energy in Sweden

The ECB's New Multi-Country Model for the euro area: NMCM — Simulated with rational expectations

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