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On the relation between regular variation and the asymptotic elasticity of substitution

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  • Alcalá, Luis A.

Abstract

This paper characterizes a class of regularly varying production functions with an asymptotic elasticity of substitution equal to one. In particular, it is shown that these functions asymptotically approximate the Cobb–Douglas form. The results generalize and unify existing results in the literature.

Suggested Citation

  • Alcalá, Luis A., 2014. "On the relation between regular variation and the asymptotic elasticity of substitution," Economics Letters, Elsevier, vol. 125(1), pages 29-31.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:1:p:29-31
    DOI: 10.1016/j.econlet.2014.08.007
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    References listed on IDEAS

    as
    1. Litina, Anastasia & Palivos, Theodore, 2008. "Do Inada conditions imply that production function must be asymptotically Cobb-Douglas? A comment," Economics Letters, Elsevier, vol. 99(3), pages 498-499, June.
    2. Barelli, Paulo & de Abreu Pessoa, Samuel, 2003. "Inada conditions imply that production function must be asymptotically Cobb-Douglas," Economics Letters, Elsevier, vol. 81(3), pages 361-363, December.
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    More about this item

    Keywords

    Regular variation; Elasticity of substitution; Asymptotic analysis; Inada conditions;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools

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