Appropriate technology and the labour share

Arbeitspapier

We provide a general theoretical characterization of how technology choice affects the long-run elasticity of substitution between capital and labour. While the shape of the technology frontier determines the long-run growth path and the long-run elasticity, adjustment costs in technology choice allow capital-labour complementarity in the short run. We develop a class of production functions that are consistent with balanced growth even in the presence of permanent investment-specific or other kinds of biased technical progress but where, consistent with empirical evidence, short-run dynamics are characterized by complementarity. Importantly, the approach is easily implementable and yields a powerful way to introduce CES-type production functions in macroeconomic models. We provide an illustration within an estimated dynamic general equilibrium model and show that the use of the new production technology provides a good match for the short and medium run behavior of the US labour share.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: School of Economics Discussion Papers ; No. 1505

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Aggregate Factor Income Distribution ; Technological Change: Choices and Consequences; Diffusion Processes ; Economic Growth and Aggregate Productivity: General
• Thema: balanced growth ; appropriate technology ; elasticity of substitution

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): León-Ledesma, Miguel A. ; Satchi, Mathan
• Ereignis: Veröffentlichung
• (wer): University of Kent, School of Economics
• (wo): Canterbury
• (wann): 2015

Weitere Informationen

• Handle: http://hdl.handle.net/10419/129999
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ