Afternoon Must-Read: Nick Bunker: Piketty, Rognlie, Karabarbounis and Neiman, and the Elasticity of Substitution | LARS P. SYLL
...Loukas Karabarbounis and Brent Neiman... show that the gross labor share and the net labor share move in the same direction when the shift is caused by a technological shock... point out that the gross and net elasticities are on the same side of 1.... Rognlie’s point about these two elasticities being lower than 1 doesn’t hold up if capital is gaining due to a new technology that makes capital cheaper...
