Elasticities, Markups and Technical Progress: Evidence from a State-Space Approach

摘要: Conventional techniques for estimating the elasticity of substitution between capital and labour in production process typically focus on factor-demand equations. An implicit assumption this approach is normally that markup stationary. But may not be true. This paper considers a new models as an unobserved variable. Using equations labour, technical progress can also estimated stochastic process, rather than just imposing time trend. The resulting estimates whole-economy UK economy suggest it has fallen over past 30 years, result appears to withstand variety robustness checks. somewhat lower most previous estimates. implies conventional misleading.