Variable markups and capital-labor substitution

摘要

We provide new estimates of the elasticity of capital-labor substitution (sigma) and the bias in technical change allowing price markups to change over time as shown in De Loecker and Eeckhout (2017). Our estimate of sigma is in the region of 0.8 and technical change is net capital-augmenting. (C) 2018 Elsevier B.V. All rights reserved.