Capital-labor substitution and economic efficiency

doi:10.2307/1927286

Home
/
Papers
/
Capital-labor substitution and economic efficiency

Journal Article•DOI•

Capital-labor substitution and economic efficiency

Kenneth J. Arrow, Hollis B. Chenery, Bagicha S. Minhas, Robert M. Solow

01 Aug 1961-The Review of Economics and Statistics-Vol. 43, Iss: 3, pp 225-250

TL;DR: In this article, the authors proposed a method to improve the quality of the service provided by the service provider by using the information of the user's interaction with the provider and the provider.

read less

Abstract: Обсуждаются следующие темы: чистая теория производства, функциональное распределение дохода, технический прогресс, источники международных конкурентных преимуществ. Анализируются эластичность замещения между трудом и капиталом в обрабатывающей промышленности; производственные функции различного типа.

...read moreread less

Citations

PDF

Open Access

More filters

Journal Article•DOI•

Can we have growth when population is stagnant? Testing linear growth rate formulas of non-scale endogenous growth models

[...]

Thomas Ziesemer¹•Institutions (1)

Maastricht University¹

15 Mar 2020-Applied Economics

TL;DR: In this paper, the authors divide scale-invariant fully or semi-endogenous growth models into six sub-categories for formulas relating steady-state growth rates of income per capita and the growth rate of the...

...read moreread less

Abstract: We sub-divide scale-invariant fully or semi-endogenous growth models into six sub-categories for formulas relating steady-state growth rates of income per capita and the growth rate of the ...

...read moreread less

7 citations

Cites result from "Capital-labor substitution and econ..."

...This value is close to the original 0.57 estimated by Arrow et al. (1961)....
[...]

Journal Article•DOI•

Capital-labor substitution elasticity: A simulated method of moments approach

[...]

Edouard Wemy¹•Institutions (1)

Clark University¹

01 Apr 2021-Economic Modelling

TL;DR: In this article, the authors exploit the short-run variations in the labor income share due to changes in capital-embodied technology and obtain an elasticity estimate that is clearly less than one.

...read moreread less

7 citations

Journal Article•DOI•

International Equity Premia and Rates for Interconnected and Heterogeneous Economies

[...]

Oliver Berndt¹•Institutions (1)

Goethe University Frankfurt¹

15 Mar 2014-Social Science Research Network

TL;DR: In this paper, the authors consider two groups of agents who have heterogeneous expectations about the future economic growth of two/N international goods and incomplete information, and the agents differ in both, with respect to the subjective rate of time preference, the levels of risk aversions and the sensitivity to habit formation.

...read moreread less

Abstract: This work studies asset pricing in which the model combines dynamic learning and heterogeneous habit formations with agents' heterogeneous beliefs and preferences in a continuous-time, general-equilibrium, and international endowment economy. The intertemporal and frictionless equilibrium model considers two groups of agents who have heterogeneous expectations about the future economic growth of two/N international goods and incomplete information. Additionally, the agents differ in both, with respect to the subjective rate of time preference, the levels of risk aversions and the sensitivity to habit formation. The fundamental dynamics of the economies are modeled with interaction across evolutions. The model provides closed-form solutions for all relevant equilibrium quantities. This includes also analytical solutions for asset pricing and asset allocation. With this approach we can perform a qualitative study of agents' heterogeneities and their implications on equilibrium co-movements as well as on cross-sectional asset returns within international financial markets. It is shown that the right combination of heterogeneities and learning agents matters and improves the current literature on asset pricing puzzles. The levels of the locally risk-free interest rates and the interest rates volatilities are close to the empirical findings for reasonable model parameters. The international equity premium can increase with the level of international growth interdependencies and the levels of heterogeneities. Depending on the structure of international growth interaction, the equity premia can be higher for both pessimistic and optimistic agents. International equity premia are closer to the empirical findings compared to standard models. Further, real exchange rate volatilities are much higher and more persistent compared to the literature and closer to the empirical findings. We developed an international workhorse model, which can explain simultaneously the international interest-rates puzzles, the international equity premium puzzles, the real exchange rate volatility puzzle, and the home bias puzzle, in light of a distinct structural economic analysis.

...read moreread less

7 citations

Cites background or methods from "Capital-labor substitution and econ..."

...Thus, from agent 1s perspective we have the following dynamics of the ltered drift (and variance) and disagreement of the dynamic linear economy (7) and (8): dm(t) = a m(t) dt+ i (t) dW i Y (t) ; and (21) d (t) = (t) (t) dt+ (t) dW 1 Y (t) (22) = ( (t) (t)) (t) dt+ (t) dW 2 Y (t) ; (23) where (t) = B (1)A aA (1)B 2 (t)AB 1 ; (24) (t) = B (1)A 1 (t) 2 (t) AB (1); and (25) i (t) = i (t)AB (1): (26) In order to specify dm(t), d (t) ; we need to specify the matrix-triplet f (t) ; (t) ; (t)g24....
[...]
...The conditional Gaussian lter for the linear dynamic economy (7) and (8) follows from theorems 12....
[...]
...From now on we use the following symbols for the generalized binomial coe¢ cients53: Fn (~x; ~y) := ~y( 1)(n+1) 1 n ~x ~y 1 n 1 and Fn (~x) := ( 1)(n+1) 1 n ~x n 1 : Proposition 3 (Equilibrium Characterization): Given the assumptions above, the agent s optimal consumptions54 are equal to bk1 (t) = " 1 1X n=1 Fn n &k ~ k (t) n k2 # 1f~ k(t)>Zkg + 1X n=1 Fn (n&k) ~ k (t) n k1 1f~ k(t)<Zkg; and (76) bk2 (t) = 1X n=1 Fn n &k ~ k (t) n k2 1f~ k(t)>Zkg + " 1 1X n=1 Fn (n&k) ~ k (t) n k1 # 1f~ k(t)<Zkg: (77) The representative agent s state price densities for each good are k (t) = 1X n=0 Fn n &k ; k1 ~ 1 k (t) 1 n k2 ~ 2 k (t) n k2 1f~ k(t)>Zkg + 1X n=0 Fn n&k; k 2 ~ 1 k (t) n k1 ~ 2 k (t) 1 n k1 1f~ k(t)<Zkg; (78) where Zk = (&k 1)&k 1 & &k k k1 is the radius for absolute convergence of the series....
[...]
...From (62) we can conclude that (T ) (t) = (T ) (t) and the dynamic of the stochastic weight- ing yields tod (T ) (T ) = d (T ) (T ) : The relative price follows from the absolute convergence of bm1 (t) and b m 2 (t) by applying p (t) = @ @ 2 U( 2(t); (t)) @ @ 1 V ( 1(t); (t)) ; see also Basak (2005) for similar considerations....
[...]
...Proof of Proposition 16 (Moment-Generating Function): From (73) we get132 ~ i k (u) ~ i k (t) l (u) l (t) = exp ( i (u t)) k (u) k (t) [ ki+(1 ki ) ki ] k (u) k (t) (1 ki ) ki l (u) l (t) ; k; l = 1; 2: (403) 132See also Radon-Nikodym Density Processs, in section 3....
[...]

Journal Article•DOI•

The Cobb-Douglas function for a continuum model

[...]

Javier Humberto Ospina Holguín¹•Institutions (1)

University of Valle¹

07 Sep 2016-Cuadernos de Economía

TL;DR: In this paper, the authors introduced two formal equivalent definitions of the Cobb-Douglas function for a continuum model based on a generalization of the Constant Elasticity of Substitution (CES) function.

...read moreread less

7 citations

Additional excerpts

...CES A x A i r i n i i r t r i = , > 0, 0 , 0 < 1, =1 ∑       ≥ ≠   for all (1)...
[...]

Journal Article•DOI•

Defender-Attacker Decision Tree Analysis to Combat Terrorism.

[...]

Ryan J. B. Garcia¹, Detlof von Winterfeldt²•Institutions (2)

Rochester Institute of Technology¹, University of Southern California²

01 Dec 2016-Risk Analysis

TL;DR: Key findings are: due to the high cost of the countermeasures, not implementing countermeasures is the preferred defensive alternative for a large range of parameters; if the probability of an attack and the associated consequences are large, a combination of DIRCMs and ground perimeter control are preferred over any single countermeasure.

...read moreread less

Abstract: We propose a methodology, called defender-attacker decision tree analysis, to evaluate defensive actions against terrorist attacks in a dynamic and hostile environment. Like most game-theoretic formulations of this problem, we assume that the defenders act rationally by maximizing their expected utility or minimizing their expected costs. However, we do not assume that attackers maximize their expected utilities. Instead, we encode the defender's limited knowledge about the attacker's motivations and capabilities as a conditional probability distribution over the attacker's decisions. We apply this methodology to the problem of defending against possible terrorist attacks on commercial airplanes, using one of three weapons: infrared-guided MANPADS (man-portable air defense systems), laser-guided MANPADS, or visually targeted RPGs (rocket propelled grenades). We also evaluate three countermeasures against these weapons: DIRCMs (directional infrared countermeasures), perimeter control around the airport, and hardening airplanes. The model includes deterrence effects, the effectiveness of the countermeasures, and the substitution of weapons and targets once a specific countermeasure is selected. It also includes a second stage of defensive decisions after an attack occurs. Key findings are: (1) due to the high cost of the countermeasures, not implementing countermeasures is the preferred defensive alternative for a large range of parameters; (2) if the probability of an attack and the associated consequences are large, a combination of DIRCMs and ground perimeter control are preferred over any single countermeasure.

...read moreread less

7 citations

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
…
183
184
185
186
187
188
189
…
190
191
192
193
194
195
196
197
198
199
200

Collapse

References

PDF

Open Access

More filters

Journal Article•DOI•

Technical change and the aggregate production function

[...]

Robert M. Solow

01 Aug 1957-The Review of Economics and Statistics

TL;DR: In this article, the authors proposed a method to improve the performance of the system by using the information of the user's interaction with the system and the system itself, including the interaction between the two parties.

...read moreread less

Abstract: В статье производится анализ агрегированной производственной функции, вводится аппарат, позволяющий различать движение вдоль такой функции от ее сдвигов. На основании сделанных в статье предположений делаются выводы о характере технического прогресса и технологических изменений. Существенное внимание уделяется вариантам применения концепции агрегированной производственной функции.

...read moreread less

10,850 citations

Journal Article•DOI•

ECONOMIC GROWTH and CAPITAL ACCUMULATION

[...]

T. W. Swan¹•Institutions (1)

Australian National University¹

01 Nov 1956-Economic Record

3,961 citations

Book•

Resource and output trends in the United States since 1870

[...]

Moses Abramovitz¹•Institutions (1)

Stanford University¹

01 Jan 1956

TL;DR: In this paper, a very brief treatment of three questions relating to the history of our economic growth since the Civil War is given, namely: (1) How large has been the net increase of aggregate output per capita, and to what extent has this increase been obtained as a result of greater labor or capital input on the one hand and of a rise in productivity on the other? (2) Is there evidence of retardation, or conceivably acceleration, in the growth of per capita output? (3) Have there been fluctuations in the rate of growth of output, apart

...read moreread less

Abstract: Introduction This paper is a very brief treatment of three questions relating to the history of our economic growth since the Civil War: (1) How large has been the net increase of aggregate output per capita, and to what extent has this increase been obtained as a result of greater labor or capital input on the one hand and of a rise in productivity on the other? (2) Is there evidence of retardation, or conceivably acceleration, in the growth of per capita output? (3) Have there been fluctuations in the rate of growth of output, apart from the shortterm fluctuations of business cycles, and, if so, what is the significance of these swings? The answers to these three questions, to the extent that they can be given, represent, of course, only a tiny fraction of the historical experience relevant to the problems of growth. Even so, anyone acquainted with their complexity will realize that no one of them, much less all three, can be treated satisfactorily in a short space. I shall have to pronounce upon them somewhat arbitrarily. My ability to deal with them at all is a reflection of one of the more important, though one of the less obvious, of the many aspects of our growing wealth, namely, the accumulation of historical statistics in this country during the last generation. For the most part, the figures which I present or which underlie my qualitative statements are taken directly from tables of estimates of national product, labor force, productivity, and the like compiled by others.

...read moreread less

1,031 citations

Book•

Mathematical Analysis for Economists

[...]

R. G. D. Allen

01 Jan 1938

926 citations

Journal Article•DOI•

International trade and the equalisation of factor prices

[...]

Paul A. Samuelson¹•Institutions (1)