The Intertemporal Elasticity of Substitution: An Analysis Based on Japanese Data
Article first published online: 28 SEP 2009
© 2009 The London School of Economics and Political Science
Volume 78, Issue 310, pages 367–390, April 2011
How to Cite
OKUBO, M. (2011), The Intertemporal Elasticity of Substitution: An Analysis Based on Japanese Data. Economica, 78: 367–390. doi: 10.1111/j.1468-0335.2009.00826.x
- Issue published online: 28 SEP 2009
- Article first published online: 28 SEP 2009
- Final version received 28 March 2009.
This paper investigates whether the intertemporal elasticity of substitution (IES) for Japan possesses similar properties to that found for the United States in the literature. As the existing empirical findings are mixed, there is no clear consensus. This paper uses a model with both production and non-separability between nondurables and durables in order to control for possible factors that cause a bias in the IES. We present the empirical results, demonstrating that the IES is quite similar between the two countries.