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- Title
The elasticity of substitution: evidence from a UK firm-level data set.
- Abstract
The article presents an overview of a study which brings new evidence on investment, output and the user cost from a panel of firms in Great Britain to resolve the uncertainty surrounding the elasticity of substitution. The elasticity of substitution between capital and other factors of production is a measure of the ease with which firms can substitute one input for another. It is concluded that the average elasticity of substitution in the panel of firms is about 0.4.
- Subjects
UNITED Kingdom; ELASTICITY (Economics); SUBSTITUTION (Economics); FACTORS of production; INVESTMENTS
- Publication
Bank of England Quarterly Bulletin, 2008, Vol 48, Issue 2, p186
- ISSN
0005-5166
- Publication type
Article