Capital-labor substitution and economic efficiency
Citations
6 citations
Cites methods from "Capital-labor substitution and econ..."
...Arrow et al. (1961) introduced the Constant Elasticity of Substitution (CES) production function which has the advantage to be a generalization of the three main functions that were used previously: the linear function (for perfect substitutes), the Leontief function (for perfect complements) and the CD function, which assume respectively an infinite, a zero and a unit elasticity of substitution (ES) between production factors. A limitation of the CES function is known as the impossibility theorem of Uzawa (1962) McFadden (1963) according to which the generalization of the class of function proposed by Arrow et al....
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...A limitation of the CES function is known as the impossibility theorem of Uzawa (1962) - McFadden (1963) according to which the generalization of the class of function proposed by Arrow et al. (1961) to more than two factors imposes a common ES between factors....
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...Arrow et al. (1961) introduced the Constant Elasticity of Substitution (CES) production function which has the advantage to be a generalization of the three main functions that were used previously: the linear function (for perfect substitutes), the Leontief function (for perfect complements) and the CD function, which assume respectively an infinite, a zero and a unit elasticity of substitution (ES) between production factors. A limitation of the CES function is known as the impossibility theorem of Uzawa (1962) McFadden (1963) according to which the generalization of the class of function proposed by Arrow et al. (1961) to more than two factors imposes a common ES between factors....
[...]
...Arrow et al. (1961) introduced the Constant Elasticity of Substitution (CES) production function which has the advantage to be a generalization of the three main functions that were used previously: the linear function (for perfect substitutes), the Leontief function (for perfect complements) and…...
[...]
...Arrow et al. (1961) introduced the Constant Elasticity of Substitution (CES) production function which has the advantage to be a generalization of the three main functions that were used previously: the linear function (for perfect substitutes), the Leontief function (for perfect complements) and the CD function, which assume respectively an infinite, a zero and a unit elasticity of substitution (ES) between production factors. A limitation of the CES function is known as the impossibility theorem of Uzawa (1962) McFadden (1963) according to which the generalization of the class of function proposed by Arrow et al. (1961) to more than two factors imposes a common ES between factors. To allow for different degrees of substitutability between inputs, Sato (1967) proposed the approach of nested CES functions which has proved very successful in general equilibrium modeling and econometric studies because of its algebraic tractability....
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6 citations
6 citations
Cites background from "Capital-labor substitution and econ..."
...Arrow et al. (1961), later on generalized for multi-level multi-factor case (Sato, 1970), visualized the technical relationship between production (Q) and the factors (Labour, L and capital, K) in the following form (well known as the CES production function): /...
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6 citations
References
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