Variable Elasticity of Substitution and Economic Growth: Theory and Evidence

Karagiannis, Giannis; Palivos, Theodore; Papageorgiou, Chris

doi:10.1007/3-540-28556-3_2

Cited by 51 publications

(63 citation statements)

References 30 publications

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“…Recent estimates of the elasticity of substitution for an aggregate production function comes from Duffy and Papageorgiou (2000) who find elasticities below unity for poor and above for rich countries using a panel of 82 countries. Using the same data, Karagiannis et al (2005) find evidence for a variable elasticity of substitution. This paper introduces a new production function with a dual elasticity of substitution building on the idea of normalizing a CES production function of De la Grandville (1989).…”

Section: Introductionmentioning

confidence: 83%

A dual elasticity of substitution production function with an application to cross-country inequality

Antony

2009

Economics Letters

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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. Terms of use: Documents in EconStor may

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Section: Introductionmentioning

confidence: 83%

A dual elasticity of substitution production function with an application to cross-country inequality

Antony

2009

Economics Letters

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“…Alternatively, Revankar's (1971) VES production function is based on the assumption that the elasticity of substitution depends on the capital-output ratio. This VES specification has been tested on several occasions with somewhat mixed results (see, e.g., Karagiannis et al (2004)). We also estimated a VES model from the panel data and found strong evidence against constant elasticity of substitution.…”

Section: Variable Elasticity Of Substitutionmentioning

confidence: 99%

Why do growth rates differ? Evidence from cross-country data on private sector production

Kilponen

Virén

2009

Empirica

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“…the elasticity of substitution between capital and labor in a convex endogenous growth model where the elasticity of substitution may interact with the level of development (Karagiannis et al, 2005;Palivos and Karagiannis, 2010); and…”

Section: Generalization Of Hicksian Elasticity Of Substitutionmentioning

confidence: 99%

Direct and dual elasticities of substitution under non-homogenous technology and nonparametric distribution

Mundra

2013

Indian Growth and Dev Review

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Direct and dual elasticities of substitution under non-homogenous technology and nonparametric distribution Kusum Mundra Article information:To cite this document: Kusum Mundra , (2013),"Direct and dual elasticities of substitution under non-homogenous technology and nonparametric distribution", Indian Growth and Development Review, Vol. 6 Iss 2 pp. 260 -288 Permanent link to this document: http://dx.Access to this document was granted through an Emerald subscription provided by emerald-srm:448207 [] For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This paper revisits the derivation and properties of the Allen-Uzawa and Morishima elasticities. Using a Swiss dataset, this paper empirically estimates various elasticities both in a dual and primal framework using a production theory open economy model and tests for linear homogenous technology. In addition to reporting elasticity at the mean, the standard practice in the literature, this paper also calculates nonparametric distribution of various elasticities. The paper aims to discuss these issues. Design/methodology/approach -To assess the effect of price change on input, the paper estimates a translog cost function and to assess the effect of quantity change on price, the paper estimates the translog distance function using the data on Swiss economy. The paper estimates Allen-Uzawa and Morishima elasticity both under homogenous and non-homogenous technology using the Swiss dataset of one aggregate gross output and four inputs (resident labor, non-resident labor, imports, and capital) over 1950-1986. Elasticities are reported and compared at the mean as well as explored by looking at the range and nonparametric distribution. Findings -This paper shows that constant returns to scale are easily rejected in this dataset and that the elasticities, both qualitatively and quantitatively, are very different under homogenous and non-homogenous technology. These elasticities can switch from complements to substitutes or vice versa when one moves away from the mean of the sample. The equality of the nonparametric elasticity distributions under homogenous vs non-homogenous technology is rejected in all cases except one. Originality/value -This paper gives a clear der...

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Variable Elasticity of Substitution and Economic Growth: Theory and Evidence

Cited by 51 publications

References 30 publications

A dual elasticity of substitution production function with an application to cross-country inequality

A dual elasticity of substitution production function with an application to cross-country inequality

Why do growth rates differ? Evidence from cross-country data on private sector production

Direct and dual elasticities of substitution under non-homogenous technology and nonparametric distribution

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