Abstract
In this short note, we show how the space of elasticity of substitution functions maps into the space of 2-input neoclassical production functions. In doing so, we derive a general analytical formula for every 2-input neoclassical production function of class C2. We present a simple set of sufficient conditions for the Inada conditions to hold; and prove that the Solow model under capital-augmenting (or investment-specific) technical change is asymptotically balanced if and only if the capital share converges to a non-degenerated limit as the capital–labor ratio tends to infinity.
| Original language | English |
|---|---|
| Pages (from-to) | 80-86 |
| Number of pages | 7 |
| Journal | Journal of Mathematical Economics |
| Volume | 67 |
| DOIs | |
| Publication status | Published - 1 Dec 2016 |
| Externally published | Yes |
Keywords
- Capital share
- Elasticity of substitution
- Labor share
- Production function
- Solow model
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