Declining labour share : Evidence of a change in the underlying production technology

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dc.contributor Suomen Pankki Ripatti, Antti Vilmunen, Jouko 2014-09-22T07:57:52Z 2014-09-22T07:57:52Z 2001
dc.identifier.isbn 951-686-721-9
dc.identifier.issn 0785-3572
dc.description.abstract The study demonstrates that the decline in the labour share in Finland can not be explained by the Cobb-Douglas production function.Instead, we propose an approach based on the constant-elasticity-of-substitution (CES) production function with labour- and capital-augmenting technical progress.The model is augmented by imperfect competition in the output market.According to the empirical results based on estimation of the first-order-conditions, the technical elasticity of substitution is significantly less than unity (0.6) and hence the Cobb-Douglas production function is rejected.The growth rate of the estimated labour-augmenting technical progress has decreased in recent years, which is not consistent with the 'new-economy' hypothesis. Capital-augmenting technical trend has exploded during the same period, which provides a possible explanation for the rapid growth of the Solow residual.The main contributing factor behind the declining labour share is, however, the increasing mark-up. Keywords: production function, elasticity of technical substitution, input-augmenting technical progress, new economy
dc.format.extent 43 s.
dc.language.iso eng
dc.subject työvoima
dc.subject pääoma
dc.subject Suomi
dc.subject palkat
dc.subject kansantulo
dc.subject tuotanto
dc.subject teknologia
dc.subject tuottavuus
dc.subject SP
dc.subject funktionaalinen tulonjako
dc.subject tuotantofunktio
dc.subject panokset
dc.subject tuotannontekijät
dc.title Declining labour share : Evidence of a change in the underlying production technology
dc.type Sarjajulkaisu
dc.identifier.urn URN:NBN:fi:bof-20140807214 Suomen Pankin keskustelualoitteita; Bank of Finland. Discussion papers
dc.series.year 2001
dc.series.number 10/2001
dc.series.sortingnumber 10 1.8.2001

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