Best techniques leave little room for substitution. A new critique of the production function

• Published in: Structural change and economic dynamics Vol. 58; pp. 509 - 533
• Main Authors: Kersting, Götz, Schefold, Bertram
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.09.2021
• Subjects: Capital theory; Production function; Reswitching; Substitution; Capital theory; Reswitching; Substitution; B24; C67; D57; Production function; C62

•The effect of distribution on the choice of efficient techniques is minimal.•We show this theoretically, by means of a new mathematical theorem, and empirically.•We hope that the result will lead to a new turn in the critique of capital. Samuelson assumed a linear wage curve for each of a continuum...