01940cas a2200265 a 4500 AALejournalIMF015967 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513518572 1018-5941 BD-DhAAL BD-DhAAL An, Zidong. On the Substitution of Private and Public Capital in Production / Zidong An, Alvar Kangur, Chris Papageorgiou. Washington, D.C. : International Monetary Fund, 2019. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Most macroeconomic models assume that aggregate output is generated by a specification for the production function with total physical capital as a key input. Implicitly this assumes that private and public capital stocks are perfect substitutes. In this paper we test this assumption by estimating a nested-CES production function whereas the two types of capital are considered separately along with labor as inputs. The estimation is based on our newly developed dataset on public and private capital stocks for 151 countries over a period of 1960-2014 consistent with Penn World Table version 9. We find evidence against perfect substitutability between public and private capital, especially for emerging and LIDCs, with the point estimate of the elasticity of substitution estimated closely around 3. Mode of access: Internet Kangur, Alvar. Papageorgiou, Chris. IMF Working Papers; Working Paper ; No. 2019/232 Full text available on IMF http://elibrary.imf.org/view/journals/001/2019/232/001.2019.issue-232-en.xml IMF e-Library