We examine inconsistencies and controversies related to the use of CES production functions in growth models. First, we show that not all variants of CES functions commonly used are consistently ...

In micro-economic theory much room is given to the discussion of inhomogeneous production functions, or more precisely, production functions with a monotonically decreasing elasticity of scale. On the ...

Download PDF More Formats on IMF eLibrary Order a Print Copy Create Citation Most macroeconomic models assume that aggregate output is generated by a specification for the production function with ...

Due Wednesday, 11/6. You may collaborate with other students, provided that you write up answers yourself and identify people you have worked with. These questions are meant to resemble what might go ...

1. If marginal product is decreasing, then average product must also be decreasing. 2. For a fixed-proportion technology, inputs cannot be substituted for each other in production. 3. The marginal ...