Normalizing VES production functions: extending the supply-side system approach

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dc.contributor.affiliationUniversidade de Santiago de Compostela. Departamento de Fundamentos da Análise Económica
dc.contributor.authorRío Iglesias, Fernando del
dc.contributor.authorRebelo, Francisco
dc.date.accessioned2026-01-12T08:22:28Z
dc.date.available2026-01-12T08:22:28Z
dc.date.issued2026
dc.description.abstractThis paper extends the Klump et al. (2007) normalization procedure to Variable Elasticity of Substitution (VES) production functions. Normalization addresses identification issues in VES model estimation, allowing joint estimation of substitution elasticities and factor-augmenting technical change, while offering a tractable extension of the normalized supply-side system that bridges the gap between CES and more flexible VES specifications.
dc.description.peerreviewedSI
dc.description.sponsorshipWe acknowledge the financial support of the Spanish Ministry of Sciences and Innovation (PID2023-147667NB-I00) and Xunta de Galicia (GRC GI-2060 ED431C2023/05)
dc.identifier.citationdel Río, F., & Rebelo, F. (2025). Normalizing VES Production Functions: Extending the Supply-Side System Approach. Economics Letters, 112794. https://doi.org/10.1016/J.ECONLET.2025.112794
dc.identifier.doi10.1016/J.ECONLET.2025.112794
dc.identifier.essn1873-7374
dc.identifier.issn0165-1765
dc.identifier.urihttps://hdl.handle.net/10347/45008
dc.journal.titleEconomics Letters
dc.language.isoeng
dc.publisherElsevier
dc.relation.projectIDinfo:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2021-2023/PID2023-147667NB-I00/ES/EFICIENCIA Y CRECIMIENTO: RECESIONES, EMPRENDIMIENTO Y CAMBIO CLIMATICO
dc.relation.publisherversionhttps://doi.org/10.1016/J.ECONLET.2025.112794
dc.rights© 2025 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
dc.rightsAttribution 4.0 Internationalen
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/
dc.subjectVariable elasticity of substitution (VES)
dc.subjectNormalization
dc.subjectFactor-Augmenting Technical Change
dc.subjectIdentification
dc.subjectCapital-labour elasticity of substitution
dc.subjectNormalized supply-side system
dc.titleNormalizing VES production functions: extending the supply-side system approach
dc.typejournal article
dc.type.hasVersionVoR
dc.volume.number259
dspace.entity.typePublication
relation.isAuthorOfPublication66a8310c-7c7c-459e-97e2-d2cefb1a41fa
relation.isAuthorOfPublication.latestForDiscovery66a8310c-7c7c-459e-97e2-d2cefb1a41fa

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