IDEAS home Printed from https://ideas.repec.org/p/red/sed014/1200.html

Micro Data and Macro Technology

Author

Listed:
  • Devesh Raval

    (Federal Trade Commission)

  • Ezra Oberfield

    (Princeton University)

Abstract

We develop a framework that uses micro data to estimate the aggregate capital-labor elasticity of substitution. We first show that the aggregate elasticity is a convex combination of the plant-level elasticity of substitution and the elasticity of demand. This expression captures substitution within plants and reallocation across plants; the relative importance of each depends on the extent of heterogeneity across plants in capital intensity. This allows us to use micro data on the cross-section of plants to estimate the aggregate elasticity at a point in time. Because we place no assumptions on the evolution of technology over time, we separately identify the bias of technical change and the aggregate elasticity. Using the US Census of Manufactures, we find that the aggregate elasticity has been stable at about 0.7. Most of the decline in the labor share over this period stems from an acceleration of the bias of technical change.

Suggested Citation

  • Devesh Raval & Ezra Oberfield, 2014. "Micro Data and Macro Technology," 2014 Meeting Papers 1200, Society for Economic Dynamics.
    • Handle: RePEc:red:sed014:1200
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    More about this item

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed014:1200. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.