Reference : A Note on the Characterization of the Neoclassical Production Function
Scientific journals : Article
Business & economic sciences : Macroeconomics & monetary economics
A Note on the Characterization of the Neoclassical Production Function
Irmen, Andreas mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Maussner, Alfred mailto [University of Augsburg > Department of Economics > Chair of Empirical Macroeconomics]
Macroeconomic Dynamics
Cambridge University Press
Yes (verified by ORBilu)
[en] Neoclassical Growth Model ; Capital Accumulation ; Inada Conditions
[en] We study production functions with capital and labor as arguments that exhibit positive, yet diminishing marginal products and constant returns to scale. We show that such functions satisfy the Inada conditions if i) both inputs are essential and ii) an unbounded quantity of either input leads to unbounded output. This allows for an alternative characterization of the neoclassical production function that altogether dispenses with the Inada conditions. While this proposition generalizes to the case of n > 2 factors of production its converse does not hold: 2n Inada conditions do not imply that each factor is essential.
University of Luxembourg - UL
Agecon C - Population Aging: An Exploration of its Effect on Economic Performance and Culture
Researchers ; Students

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