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A CES Indirect Production Function

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  • Jovanovic, B.

Abstract

This paper derives an indirect production function that is, in a special case, of a constant elasticity of substitution form. This is not a contribution to the theory of aggregation generally. Instead it is a microfoundation for a specific but popular production function -- the CES-- that helps us express the important concept of the elasticity of substitution in terms of more primitive, and more intuitive concept of the returns to scale.

Suggested Citation

  • Jovanovic, B., 1996. "A CES Indirect Production Function," Working Papers 96-15, C.V. Starr Center for Applied Economics, New York University.
    • Handle: RePEc:cvs:starer:96-15
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    References listed on IDEAS

    as
    1. Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 43(2), pages 217-235.
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    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Robert M. Solow, 1955. "The Production function and the Theory of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(2), pages 101-108.
    5. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    6. Cooley, Thomas F. & Greenwood, Jeremy & Yorukoglu, Mehmet, 1997. "The replacement problem," Journal of Monetary Economics, Elsevier, vol. 40(3), pages 457-499, December.
    7. Benhabib, Jess & Perli, Roberto & Xie, Danyang, 1994. "Monopolistic competition, indeterminacy and growth," MPRA Paper 37411, University Library of Munich, Germany, revised 1994.
    8. J. K. Whitaker, 1968. "Capital Aggregation and Optimality Conditions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(4), pages 429-442.
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    More about this item

    Keywords

    ELASTICITY; ECONOMIC GROWTH; PRODUCTION;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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