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Normalized CES supply-side system approach: How to replicate Klump, McAdam, and Willman (2007)

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  • Daniels, Gerald Eric
  • Kakar, Venoo

Abstract

This paper lays out a replication plan for the influential paper by Klump et al. (Factor Substitution and Factor-augmenting Technical Progress in the United States: a Normalized Supply-side System Approach 2007) on using a normalized CES supply-side system approach to estimate the value of the elasticity of substitution between factors of production and identify the growth patterns for biased technical progress. The authors begin with a general discussion of basic principles on carrying out a replication study. Further, they outline key steps to follow to replicate the chosen paper and establish criteria that can be used to determine if the replication confirms or disconfirms the original findings. This paper contributes to the increased interest in improving replications in economics research.

Suggested Citation

  • Daniels, Gerald Eric & Kakar, Venoo, 2018. "Normalized CES supply-side system approach: How to replicate Klump, McAdam, and Willman (2007)," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-11.
    • Handle: RePEc:zbw:ifweej:201819
    DOI: 10.5018/economics-ejournal.ja.2018-19
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    References listed on IDEAS

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    1. Jan H. Höffler, 2017. "Replication and Economics Journal Policies," American Economic Review, American Economic Association, vol. 107(5), pages 52-55, May.
    2. Alan J. Auerbach, 2003. "Fiscal Policy, Past and Present," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(1), pages 75-138.
    3. Michael A. Clemens, 2017. "The Meaning Of Failed Replications: A Review And Proposal," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 326-342, February.
    4. Lucas C. Coffman & Muriel Niederle & Alistair J. Wilson, 2017. "A Proposal to Organize and Promote Replications," American Economic Review, American Economic Association, vol. 107(5), pages 41-45, May.
    5. Maren Duvendack & Richard Palmer-Jones & W. Robert Reed, 2017. "What Is Meant by "Replication" and Why Does It Encounter Resistance in Economics?," American Economic Review, American Economic Association, vol. 107(5), pages 46-51, May.
    6. Daniel S. Hamermesh, 2007. "Replication in Economics," NBER Working Papers 13026, National Bureau of Economic Research, Inc.
    7. Olivier de La Grandville & Rainer Klump, 2000. "Economic Growth and the Elasticity of Substitution: Two Theorems and Some Suggestions," American Economic Review, American Economic Association, vol. 90(1), pages 282-291, March.
    8. Alan J. Auerbach, 1983. "Corporate Taxation in the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 14(2), pages 451-514.
    9. Rainer Klump & Peter McAdam & Alpo Willman, 2012. "The Normalized Ces Production Function: Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 26(5), pages 769-799, December.
    10. Kenneth G. Stewart, 2018. "Normalized CES supply systems: Replication of Klump, McAdam, and Willman (2007)," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 33(2), pages 290-296, March.
    11. Andrew C. Chang & Phillip Li, 2017. "A Preanalysis Plan to Replicate Sixty Economics Research Papers That Worked Half of the Time," American Economic Review, American Economic Association, vol. 107(5), pages 60-64, May.
    12. Miguel A. León-Ledesma & Peter McAdam & Alpo Willman, 2010. "Identifying the Elasticity of Substitution with Biased Technical Change," American Economic Review, American Economic Association, vol. 100(4), pages 1330-1357, September.
    13. Daniel S. Hamermesh, 2007. "Viewpoint: Replication in economics," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 715-733, August.
    14. Gerald Daniels & Venoo Kakar, 2017. "Economic Growth and the CES Production Function with Human Capital," Economics Bulletin, AccessEcon, vol. 37(2), pages 930-951.
    15. James Berry & Lucas C. Coffman & Douglas Hanley & Rania Gihleb & Alistair J. Wilson, 2017. "Assessing the Rate of Replication in Economics," American Economic Review, American Economic Association, vol. 107(5), pages 27-31, May.
    16. Rainer Klump & Peter McAdam & Alpo Willman, 2007. "Factor Substitution and Factor-Augmenting Technical Progress in the United States: A Normalized Supply-Side System Approach," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 183-192, February.
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    Cited by:

    1. Reed, W. Robert, 2019. "Takeaways from the special issue on The Practice of Replication," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-11.
    2. Catherine Bruneau & Pierre-Luis Girard, 2021. "Labor Productivity in France: Is the Slowdown of its Growth Inevitable or are there Levers to fight it?," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 7(1), pages 9-40, January.

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    More about this item

    Keywords

    elasticity of substitution; human capital; economic growth; factor shares; CES production function;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Normalized CES supply-side system approach: how to replicate Klump, McAdam, and Willman (2007) (Economics e-journal 2018) in ReplicationWiki

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