Isoelastic elasticity of substitution production functions

Jakub Growiec

No 201, NBP Working Papers from Narodowy Bank Polski

Abstract: We generalize the normalized Constant Elasticity of Substitution (CES) production function by allowing the elasticity of substitution to vary isoelastically with (i) relative factor shares, (ii) marginal rates of substitution, (iii) capital–labor ratios, or (iv) capital–output ratios. Ensuing four variants of Isoelastic Elasticity of Substitution (IEES) production functions have a range of intuitively desirable properties and yield empirically testable predictions for the functional relationship between relative factor shares and capital–labor ratios.

Keywords: production function; factor share; elasticity of substitution; marginal rate of substitution; normalization. (search for similar items in EconPapers)
JEL-codes: E23 O47 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-eff, nep-gro and nep-mac
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: ISOELASTIC ELASTICITY OF SUBSTITUTION PRODUCTION FUNCTIONS (2020)
Working Paper: Isoelastic Elasticity of Substitution Production Functions (2016)
Working Paper: Isoelastic Elasticity of Substitution Production Functions (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:201

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