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Normalized CES supply systems: Replication of Klump, McAdam, and Willman (2007)
Author(s) -
Stewart Kenneth G.
Publication year - 2018
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.2591
Subject(s) - spurious relationship , econometrics , homogeneity (statistics) , logarithm , replication (statistics) , unitary state , maxima , economics , mathematics , computer science , mathematical economics , statistics , art , mathematical analysis , performance art , political science , law , art history
Summary The analysis of Klump, McAdam, and Willman ( Review of Economics and Statistics , 2007, 89 , 183–192) is replicated using alternative software. Their results are verified substantively and, in large measure, numerically. Contributions include a more explicit consideration of the nested testing structure than has appeared previously, and the appropriate means of imposing and testing the special case of logarithmic growth in technology. Also, plots of the likelihood serve to emphasize that maxima in the neighborhood of a unitary elasticity of substitution are often a spurious artifact of the singularity of the model at this point, of which empirical researchers should beware.