Micro Data and Macro Technology

Abstract

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. Terms of use: Documents in AbstractWe study the implications of microeconomic heterogeneity for aggregate technology, showing that the aggregate elasticity of substitution between capital and labor can be expressed as a simple function of plant level structural parameters and sufficient statistics for plant heterogeneity. This allows for a new approach to estimating the aggregate elasticity using microeconomic data and allows us to examine how the aggregate elasticity varies over time or across countries. We then use plant level data from the Census of Manufactures to construct an aggregate elasticity of substitution for the manufacturing sector, and estimate an aggregate elasticity of approximately 0.72 in 1987. We find that the aggregate elasticity has risen over time in the US and is higher in less developed countries. These differences are quantitatively important; our estimates imply that a change in the interest rate has a 50 percent larger impact on India than the US. Finally, we measure the bias of aggregate technical change using our estimates of the aggregate elasticity, and find that the bias of technical change has increased in recent years.

Accounting for Factorless Income

“…is close to estimates in Karabarbounis and Neiman (2014) and the second of which is close to the estimates in Oberfield and Raval (2014) and the values discussed in Chirinko (2008).…”

Credit and the Labor Share: Evidence from U.S. States

“…However, they are higher than the value of 0.71 estimated by Oberfield and Raval (2014) using plant-level data.…”

“…Piketty and Zucman (2014) similarly find evidence for the growing role of capital. On the other hand, using microeconometric estimates of the elasticity of substitution between capital and labor, Oberfield and Raval (2014) find that the decline in the labor share originates from factors that affect technology, including automation and offshoring, rather than mechanisms that work mainly through factor prices.…”

“…Baseline State-Industry-Year Results We begin by estimating equation (26), which 35 One possible explanation for the difference in the estimates is the well-known "aggregation bias," although Oberfield and Raval (2014) do account for that, at least at the U.S. level.…”

Income Shares, Secular Stagnation, and the Long-Run Distribution of Wealth

“…As Jones (2016) points out, this is only likely to hold when the capital input to the production function includes land (thus stretching the notion of "capital"). Additionally, the empirical evidence is mixed with respect to whether the elasticity of substitution between capital and labor is higher or smaller than one: Karabarbounis and Neiman (2013) find an elasticity of substitution around 1.25 using a cross-section of countries, while Oberfield and Raval (2014) and Semieniuk (2017) find elasticities of substitution below one. Finally, the Piketty inequality only makes sense when the growth rate g is exogenous and the rate of return r is endogenous: in Classical and Kaleckian theories, for instance, the growth rate and the profit rate are related through the Cambridge equation g = sr which establishes a causal link from the (exogenous) rate of return to the (endogenous) growth rate via the saving propensity.…”