Is the U.S. aggregate production function Cobb-Douglas? New estimates of the elasticity of substitution

Contributions to Macroeconomics

Volumn 4, Issue 1, 2004, Pages

  Antràs, Pol ^a,b  

^a HARVARD UNIVERSITY   (United States)

^b HARVARD UNIVERSITY   (United States)

Author keywords

Capital Labor Substitution; Technological Change

Indexed keywords

EID: 14944357038     PISSN: 15346005     EISSN: 15346005     Source Type: Journal    
DOI: 10.2202/1534-6005.1161     Document Type: Review

References (57)

1. Acemoglu, Daron K. (2002), "Directed Technical Change," Review of Economic Studies, 69, pp. 781-810.
2. Acemoglu, Daron K. (2003), "Labor- and Capital-Augmenting Technical Change," Journal of the European Economic Association, 1, pp. 1-37.
3. Antras, Pol (2003), "Is the U.S. Aggregate Production Function Cobb-Douglas? New Estimates of the Elasticity of Substitution," Harvard University, mimeo.
4. Arrow, Kenneth J., Hollis B. Chenery, Bagicha Minhas, and Robert M. Solow (1961), "Capital-Labor Substitution and Economic Efficiency," Review of Economics and Statistics, 43:5, pp. 225-254.
5. Barro, Robert, and Xavier Sala-i-Martin (1995), Economic Growth, Cambridge, MA: MIT Press.
6. Basu, Susanto (1996), "Procyclical Productivity: Increasing Returns or Cyclical Utilization?," Quarterly Journal of Economics, 111:3, pp. 719-751.
7. Bentolila, Samuel, and Gilles Saint-Paul (2003), "Explaining Movements in the Labor Share", Contributions to Macroeconomics, 3:1, Article 9, http://www.bepress.com/bejm/contributions/vol3/iss1/art9.
8. Berndt, Ernst (1976), "Reconciling Alternative Estimates of the Elasticity of Substitution," Review of Economics and Statistics, 58:1, pp. 59-68.
9. _ (1991), The Practice of Econometrics: Classic and Contemporary. Reading, Mass.: Addison-Wesley.
10. _ and Laurits R. Christensen (1973), "The Translog Function and the Substitution of Equipment, Structures and Labor in U.S. Manufacturing 1929-68," Journal of Econometrics, March, pp. 81-114.
11. Blanchard, Olivier (1997), "The Medium Run," Brookings Papers on Economic Activity, pp. 89-158.
12. Blough, Stephen R. (1992), "Spurious Regressions, with AR(1) Correction and Unit Root Pretest," Johns Hopkins University, Mimeo.
13. Bound, John, David A. Jaeger and Regina M. Baker (1995), "Problems with Instrumental Variables Estimation When the Correlation Between the Instruments and the Endogeneous Explanatory Variable is Weak," Journal of the American Statistical Association, 90:430, pp. 443-450.
14. Burnside, Craig, Martin Eichenbaum, and Sergio Rebelo (1995), "Capital Utilization and Returns to Scale," NBER Macroeconomics Annual 1995, pp. 67-110.
15. Chirinko, Robert S. (2002), "Corporate Taxation, Capital Formation, and the Substitution Elasticity between Capital and Labor," National Tax Journal, 55:2, pp. 339-355.
16. Coen, R. M. (1969), "Tax Policy and Investment Behavior: A Comment," American Economic Review, 59:3, pp. 370-379.
17. David, Paul A. and Th. van de Klundert (1965), "Biased Efficiency Growth and Capital-Labor Substitution in the U.S., 1899-1960," American Economic Review, 55, pp. 357-393.
18. Dhrymes, P. J., and P. Zarembka (1970), "Elasticities of Substitution for for Two-Digit Manufacturing Industries: A Correction," Review of Economics and Statistics, February, pp. 115-117.
19. Diamond, Peter, Daniel McFadden, and Miguel Rodriguez (1978), "Measurement of the Elasticity of Factor Substitution and Bias of Technical Change," in Production Economics: A Dual Approach to Theory and Applications (Volume 2), edited by Melvyn Fuss and Daniel McFadden, Amsterdam: North-Holland, pp. 125-147.
20. Diewert, W. Erwin (1971), "An Application of the Shepard Duality Theorem: A Generalized Linear Production Function," Journal of Political Economy, 79:3, pp. 482-50.
21. Eisner, R., and M. I. Nadiri (1968), "Investment Behavior and the Neoclassical Theory," Review of Economics and Statistics, 50:3, pp. 369-382.
22. Engle, Robert F. and Clive W. J. Granger (1987), "Co-Integration and Error Correction: Representation, Estimation, and Testing," Econometrica, 55:2, pp. 251-276.
23. Gollin, Douglas (2002), "Getting Income Shares Right," Journal of Political Economy, 110:2, pp. 458-474.
24. Gordon, R. J. (1990), The Measurement of Durable Goods Prices, National Bureau of Economic Research Monograph Series, Chicago: University of Chicago Series.
25. Granger, Clive W. J. and Paul Newbold (1974), "Spurious regressions in econometrics," Journal of Econometrics, 2, pp. 111-120.
26. Greene, William H. (1999), Econometric Analysis, fourth edition, New York: MacMillan.
27. Fair, Ray C. (1970), "The Estimation of Simultaneous Equation Models with Lagged Endogenous Variables and First Order Serially Correlated Errors," Econometrica, 38:3, pp. 507-516.
28. Fraumeni, Barbara M. (1997), "The Measurement of Depreciation in the NIPA's," Survey of Current Business, July, Bureau of Economic Activity.
29. Hall, Robert E. and Dale W. Jorgenson (1967), "Tax Policy and Investment Behaviour", American Economic Review, 57, pp. 391-414.
30. Hamilton, James (1994), Time Series Analysis, Princeton, NJ: Princeton University Press.
31. Hausman, Jerry A. (1978), "Specification Tests in Econometrics," Econometrica, 46:6, pp. 1251-1271.
32. _ (1983), "Specification and Estimation of Simultaneous Models," in Z. Griliches and M. Intriligator (eds.), Handbook of Econometrics, Vol. 1, 1983, pp. 391-448.
33. Herman, Shelby W. (2000), "Fixed Assets and Consumer Durable Goods-Estimates for 1925-98 and New NIPA Table: Changes in Net Stock of Produced Assets," Survey of Current Business, April, Bureau of Economic Activity.
34. Hsieh, Chang-Tai (2000), "Measuring Biased Technological Change," Princeton University, mimeo.
35. Johansen, Soren (1988), "Statistical Analysis of Cointegration Vectors," Journal of Economic Dynamics and Control, 12, pp. 231-54.
36. _ (1991), "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, 59:6, pp. 1551-1580.
37. _ and Katarina Juselius (1990), "Maximum Likelihood Estimation and Inference on Cointegration - With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, 52, pp. 169-210.
38. Jones, Charles I. (2003), "Growth, Capital Shares, and a New Perspective on Production Functions," University of California at Berkeley, mimeo.
39. Jorgenson, Dale W. and Mun S. Ho (2000), "The Quality of the U.S. Workforce 1948-95," Harvard University, mimeo with data update through 1999.
40. _ and Kevin J. Stiroh (2000), "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, 1, pp. 125-211.
41. Judd, Kenneth L. (1987), "The Welfare Cost of Factor Taxation in a Perfect-Foresight Model," Journal of Political Economy, 95:4, pp. 675-709.
42. Kalt, Joseph P. (1978), "Technological Change and Factor Substitution in the United States: 1929-1967," International Economic Review, 19, pp. 761-775.
43. King, Robert G., Charles I. Plosser, James H. Stock and Mark W. Watson (1991), "Stochastic Trends and Economic Fluctuations," American Economic Review, 81:4, pp. 819-840.
44. Klump, Rainer and Olivier De La Grandville (2000), "Economic Growth and the Elasticity of Substitution: Two Theorems and Some Suggestions," American Economic Review, 90:1, pp. 282-291.
45. Krueger, Alan B. (1999), "Measuring Labor's Share," American Economic Review, 89:2, pp. 45-51.
46. Krusell, Per, Lee Ohanian, Jose Victor Rios-Rull and Gianluca Violante (2000), "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis", Econometrica, 68, pp. 1029-1054.
47. Lucas, Robert E. (1969), "Labor-Capital Substitution in U.S. Manufacturing," in The Taxation of Income from Capital, edited by Arnold Harberger and Martin J. Bailey, Washington, DC: The Brookings Institution, pp. 223-274.
48. MacKinnon, J. (1991), "Critical Values for Co-Integration Tests," in R.F. Engle and C.W.J. Granger (eds.) Long-Run Economic Relationships, Oxford University Press, pp. 267-76.
49. Maddala, G. S. (1965), "Differential Industry Effects and Differential Factor Effects of Technological Change," Memo 36, Research Center in Economic Growth, Stanford University.
50. Mankiw, Gregory N., David Romer, David N. Weil (1992), "A Contribution to the Empirics of Economic Growth," Quarterly Journal of Economics, 107:2, pp. 407-437.
51. Nerlove, Marc (1963), "Returns to Scale in Electricity Supply," in Carl Christ, ed., Measurement in Economics: Studies in Mathematical Economics and Econometrics in Memory of Yehuda Grunfeld, Standford, CA: Stanford University Press, pp. 167-198.
52. _ (1967), "Recent Empirical Studies of the CES and Related Production Functions." In M. Brown, editor, The Theory and Empirical Analysis of Production, New York: Columbia University Press for Studies in Income and Wealth Series 32, pp. 55-122.
53. Phillips, Peter C. B. (1986), "Understanding Spurious Regressions in Econometrics," Journal of Econometrics, 33, pp. 311-40.
54. _ and Stephen Durlauf (1986), "Multiple Time Series Regression with Integrated Processes," Review of Economic Studies, 53:4, pp. 473-495.
55. Saikkonen, Pentti (1991), "Asymptotically Efficient Estimation of Cointegration Regressions," Econometric Theory, 7, pp. 1-21.
56. Stock, James H. (1987), "Asymptotic Properties of Least Squares Estimators of Cointegrating Vectors," Econometrica, 55:5, pp. 1035-1056.
57. Trostel, Philip A. (1993), "The Effect of Taxation on Human Capital," Journal of Political Economy, 101:2, pp. 327-350.