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Holoreturns And Holothetic Invariance in Economics

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  • Mughal, Adil Ahmad

Abstract

Hicks neutral technical progress implies that in Y = AF(K, L) any technical progress only changes the technological knowledge, A, but does not af ect inputs and this is the Hicks-neutral holothetic result given by Sato in which the technical progress transforms into a scale ef ect without changing the map of isoquants to non-holothetic trajectory. This holothetic nature of production functions is possible under Lie-group like transformations with invariance properties for production functions under a given technical progress. This paper proposes a Farkas Lemma-like character of this holothetic transformation. Kostant's Convexity Theorem is a well-generalized result of convexity on Lie-group transformations concerning holotheticity. There's an 'equilibrium pricing' way found here for a convexity assumption implying 'holothetic invariance'.

Suggested Citation

  • Mughal, Adil Ahmad, 2022. "Holoreturns And Holothetic Invariance in Economics," MPRA Paper 114641, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:114641
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    References listed on IDEAS

    as
    1. Constantinides, George M & Duffie, Darrell, 1996. "Asset Pricing with Heterogeneous Consumers," Journal of Political Economy, University of Chicago Press, vol. 104(2), pages 219-240, April.
    2. Ryuzo Sato, 1980. "The Impact of Technical Change on the Holotheticity of Production Functions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(4), pages 767-776.
    3. Andrew McLennan, 2018. "Advanced Fixed Point Theory for Economics," Springer Books, Springer, number 978-981-13-0710-2, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Holotheticity; Homothetic technology; Economic Invariance; Lie groups; Transformation groups; Farkas' Lemma; Holoreturns; Idiosyncratic risk; Kostant Convexity;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • G0 - Financial Economics - - General
    • G01 - Financial Economics - - General - - - Financial Crises

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