TY  - RPRT
        AU  - Paul, Saumik
AU  - Raju, Dhushyanth
        TI  - Nonlinear Propagation of Sectoral Productivity Shocks with Variable Elasticities of Substitution
        PY  - 2023/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16611
        UR  - https://www.iza.org/index.php/publications/dp16611
        AB  - This paper examines the nonlinear propagation of sectoral productivity shocks in a general equilibrium framework with intersectoral linkages characterized by allowing elasticities of substitution in sectoral outputs and sectoral productivities to vary across sector pairs. Evidence based on a sample of 38 countries and 35 sectors shows stronger roles of certain sectors in the aggregate propagation of sectoral productivity shocks with variable elasticities than with constant elasticities. The results of sectoral productivity shocks on cross-country income convergence between 2005 and 2011 are robust across the two types of elasticities in terms of the direction of change, but not the magnitude.
        KW  - nonlinear propagation of productivity shock
KW  - Morishima elasticity of substitution
KW  - intersectoral linkages
        ER  -