Andrés Vázquez (Spanish Council for Scientific Research)
Abstract
This note suggests a measure for the two-input arc elasticity of substitution that comes up naturally and preserves the salient characteristic of the Hicks-Robinson original concept. In particular, (i) it gives the average value of point substitution elasticities over the logarithmic arc of the input price ratio, and leads therefore to the exact estimation of the CES production function family, and (ii) its relationships with the discrete change in factor shares are formally parallel to those well known for the point elasticity assumption.
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Publisher Info
Article provided by El Colegio de México, Centro de Estudios Económicos in its journal Estudios Económicos.
Find related papers by JEL classification: D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity D33 - Microeconomics - - Distribution - - - Factor Income Distribution
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