Calibration of normalised CES production functions in dynamic models

Rainer Klump and Marianne Saam

No 06-078, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Normalising CES production functions in the calibration of basic dynamic models allows to choose technology parameters in an economically plausible way. When variations in the elasticity of substitution are considered, normalisation is necessary in order to exclude arbitrary effects. As an illustration, the effect of the elasticity of substitution on the speed of convergence in the Ramsey model is computed with different normalisations.

Keywords: CES production functions; normalisation; calibration; Ramsey model (search for similar items in EconPapers)
JEL-codes: E24 E27 O41 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Calibration of normalised CES production functions in dynamic models (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:5471

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