Estimation of sectoral elasticities of substitution along the international technology frontier

Arbeitspapier

Sectoral heterogeneity is crucial to address several economic questions. This paper provides a detailed mapping of sectoral production possibility frontiers, using different nesting structures and levels of aggregation (primary, secondary, tertiary activities and energy-intensive firms). Elasticities of substitution between capital, labour and energy are identified by employing an international multi-sector dataset, accounting for biased technological change and normalising the production function to clusters of observations. Complementarity dominates, with the noteworthy exception of the capital-labour composite, close to Cobb-Douglas. I also present some stylized facts relating substitution elasticities to sectoral characteristics.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 13-092

Classification and Topics

• Classification: Wirtschaft ; Computable General Equilibrium Models ; Industrialization; Manufacturing and Service Industries; Choice of Technology ; One, Two, and Multisector Growth Models ; Energy and the Macroeconomy
• Subject: Constant Elasticity of Substitution ; Normalisation ; Sectoral Disaggregation ; Nested CES Structure ; Energy Demand

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baccianti, Claudio
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/88125
• URN: urn:nbn:de:bsz:180-madoc-352453
• Last update: 10.03.2025, 11:44 AM CET