Data and Code for: The Elasticity of Aggregate Output with Respect to Capital and Labor

Principal Investigator(s):  View help for Principal Investigator(s) Dietrich Vollrath, University of Houston

Version:  View help for Version V1

Name File Type Size Last Modified
  Code 12/21/2023 12:29:PM
  Data 11/01/2023 05:17:PM
LICENSE.txt text/plain 15.2 KB 12/21/2023 07:19:AM
README.pdf application/pdf 232.2 KB 12/21/2023 07:41:AM
README.tex text/x-matlab 22.3 KB 12/21/2023 07:40:AM

Project Citation: 

Vollrath, Dietrich. Data and Code for: The Elasticity of Aggregate Output with Respect to Capital and Labor. Nashville, TN: American Economic Association [publisher], 2024. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-08-16. https://doi.org/10.3886/E194858V1

Project Description

Summary:  View help for Summary
It is often assumed that the elasticity of GDP with respect to capital is one-third, but this assumes zero markups and an aggregate production function. I estimate the elasticity allowing markups to vary by industry and with a rich input-output structure. Assumptions about capital costs provide bounds on the elasticity. In the U.S. from 1948-1995 the capital elasticity was in the range 0.19- 0.32 and this shifted to 0.24-0.37 by 1996-2018. Excluding housing or de-capitalizing intellectual property lowers those bounds to as low as 0.11-0.26. Based on these elasticities, common estimates of total factor productivity growth represent a lower bound.

Scope of Project

Subject Terms:  View help for Subject Terms labor elasticity; capital elasticity; labor share; national income accounting
JEL Classification:  View help for JEL Classification
      E01 Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
      E13 General Aggregative Models: Neoclassical
      E22 Investment; Capital; Intangible Capital; Capacity
      E23 Macroeconomics: Production
      E25 Aggregate Factor Income Distribution
      N12 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: 1913-
      O40 Economic Growth and Aggregate Productivity: General
Geographic Coverage:  View help for Geographic Coverage United States
Time Period(s):  View help for Time Period(s) 1948 – 2018
Data Type(s):  View help for Data Type(s) aggregate data


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