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| Title: | Empirical Essays on the Elasticity of Substitution, Technical Change, and Economic Growth |
| Authors: | Pereira, Claudiney M |
| Advisors: | John J. Seater, Committee Chair |
| Keywords: | elasticity of substitution
estimation
production theory |
| Issue Date: | 28-Jul-2003 |
| Degree: | PhD |
| Discipline: | Economics |
| Abstract: | We estimate the elasticity of substitution using two different production functions. The usual Constant Elasticity of Substitution (CES) production function and a Box-Cox production function for Japan (1890-1991), UK (1870-1991), and US (1890-1992; 1929-2000). The main results are that we find the ES to be non-unitary and changing over time. Our findings have implications for economic growth (theoretical and empirical), as production is an increasing function of the ES. The use of a Cobb-Douglas production function, as in most cases in the literature, hides the role of the ES not only as a source of increase in output but also as a source of technical change. Also, we found in a monte carlo simulation that usual CES production usually does not give reliable estimates for the substitution parameter. Finally, using a CES to calculate TFP across countries, we found that variance of TFP is lower than using a Cobb-Douglas. It implies that the importance of TFP to explain income differences across countries is diminished. |
| URI: | http://www.lib.ncsu.edu/resolver/1840.16/4460 |
| Appears in Collections: | Dissertations
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