This paper uses normalized constant elasticity of substitution production functions to estimate the elasticity of substitution and labour-augmenting technical change in South Africa over the period 1994-2012. We find elasticities of 0.6-0.9 and positive labour-augmenting technical change, which...

The elasticity of substitution between capital and labor (σ) is usually considered a "deep parameter". This paper shows, in contrast, that σ is affected by both globalization and technology, and that different intensities in these drivers have different consequences for the OECD and the...

This paper addresses the relationship between technical change and the elasticity of substitution between factors of production. It is shown how the elasticity within a CES production setting can change due to technical change. Technical change is interpreted in the spirit of horizontal...

I estimate CES aggregate production functions for the US, the UK, Japan, Germany, and Spain using data from the EU KLEMS database. I distinguish between three types of capital: information and communication technologies (ICT), intellectual property (IP) capital, and traditional capital. I assume...

Most macroeconomic models assume that aggregate output is generated by a specification for the production function with total physical capital as a key input. Implicitly this assumes that private and public capital stocks are perfect substitutes. In this paper we test this assumption by...

We reconcile conflicting evidence on the magnitude of the elasticity of substitution of land for capital, which is a key determinant of the relationship between the price of land and the density of land use. We first compare the performance of classic estimation approaches with a new estimation...