This paper offers a new interpretation of the elasticity of substitution in the constant elasticity of substitution (CES) utility function under discrete choice and separability. We model an economy ...

This is a preview. Log in through your library . Abstract In all common models of inter-temporal allocation, the assumption of a constant elasticity of intertemporal substitution (EIS) imposes ...

When it decreases, the market mimics anti-competitive behavior. The constant elasticity of substitution is the only case in which all competitive effects are washed out. We also show that our results ...

Empirical evidence indicates that the elasticity of capital-labor substitution for the aggregate U.S. economy is below unity. In contrast, the existing indeterminacy literature has mostly restricted ...