 Normalized CES Supply Systems: Replication of Klump, McAdam, and Willman (2007)No 1807, Department Discussion Papers from Department of Economics, University of Victoria Abstract: In light of the literature that it has spawned, Klump, McAdam, and Willman (Factor substitution and factor-augmenting technical progress in the United States: A normalized supply-side system approach. Review of Economics and Statistics 2007; 89(1): 183–192) can be seen to be an iconic empirical implementation that has helped resurrect interest in CES functional forms and parametric supply-side systems. This replication revisits their analysis using alternative software, confirming their results substantively and, in large measure,numerically. Contributions include a more explicit consideration of the nested testing structure than has appeared previously, and the appropriate means of imposing and testing the special case of logarithmic growth in technology. As well, plots of the likelihood serve to emphasize that maxima in the neighborhood of a unitary elasticity of substitution are often a spurious artifact of the singularity of the model at this point, of which empirical researchers should beware. JEL Classification: C22, E23, E25, O30, O51 Keywords: capital-labour substitution; technological change; supply-side system (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:vic:vicddp:1807 Access Statistics for this paper More papers in Department Discussion Papers from Department of Economics, University of Victoria PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2. Contact information at EDIRC. |
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