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Do Inada conditions imply that production function must be asymptotically Cobb-Douglas? A comment

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  • Litina, Anastasia
  • Palivos, Theodore

Abstract

We correct an intermediate mistake in Barelli and Pessôa [Barelli P. and Pessôa S. de A., 2003, "Inada conditions imply that production function must be asymptotically Cobb-Douglas," Economics Letters 81, 361-363] and show that the main result is still valid. We also show that Barelli and Pessôa wrongly identified the class of functions with elasticity of substitution asymptotically equal to one as the Cobb-Douglas class.

Suggested Citation

  • Litina, Anastasia & Palivos, Theodore, 2008. "Do Inada conditions imply that production function must be asymptotically Cobb-Douglas? A comment," Economics Letters, Elsevier, vol. 99(3), pages 498-499, June.
    • Handle: RePEc:eee:ecolet:v:99:y:2008:i:3:p:498-499
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    References listed on IDEAS

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    1. Barelli, Paulo & de Abreu Pessoa, Samuel, 2003. "Inada conditions imply that production function must be asymptotically Cobb-Douglas," Economics Letters, Elsevier, vol. 81(3), pages 361-363, December.
    2. de la Croix,David & Michel,Philippe, 2002. "A Theory of Economic Growth," Cambridge Books, Cambridge University Press, number 9780521001151, January.
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    Cited by:

    1. de la Fonteijne, Marcel R., 2018. "Why the concept of Hicks, Harrod, Solow neutral and even non-neutral augmented technical progress is flawed in principle in any economic model," MPRA Paper 107730, University Library of Munich, Germany.
    2. de la Fonteijne, Marcel R., 2015. "Do Inada Conditions imply Cobb-Douglas Asymptotic Behavior or only a Elasticity of Substitution equal to one," MPRA Paper 82304, University Library of Munich, Germany.
    3. Andreas Irmen & Alfred Maußner, 2014. "Essential Inputs and Unbounded Output: an Alternative Characterization of the Neoclassical Production Function," DEM Discussion Paper Series 14-27, Department of Economics at the University of Luxembourg.
    4. Lee E. Ohanian & Paulina Restrepo-Echavarria & Mark L. J. Wright, 2018. "Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America," American Economic Review, American Economic Association, vol. 108(12), pages 3541-3582, December.
    5. Lee E. Ohanian & Paulina Restrepo-Echavarria & Mark L. J. Wright, 2013. "Bad Investments and Missed Opportunities? Capital Flows to Asia and Latin America, 1950-2007," Working Papers 2014-38, Federal Reserve Bank of St. Louis.
    6. Litina, Anastasia & Palivos, Theodore, 2010. "The Behavior Of The Saving Rate In The Neoclassical Optimal Growth Model," Macroeconomic Dynamics, Cambridge University Press, vol. 14(4), pages 482-500, September.
    7. Nicol`o Cangiotti & Mattia Sensi, 2020. "Exact solutions for a Solow-Swan model with non-constant returns to scale," Papers 2008.05875, arXiv.org.
    8. Alcalá, Luis A., 2014. "On the relation between regular variation and the asymptotic elasticity of substitution," Economics Letters, Elsevier, vol. 125(1), pages 29-31.
    9. Ozkaya, Ata, 2021. "Inada conditions asymptotically transform production function into the Cobb–Douglas," Economics Letters, Elsevier, vol. 201(C).
    10. Mehdi Senouci, 2012. "Technical change in a neoclassical two-sector model of optimal growth," PSE Working Papers halshs-00589627, HAL.
    11. Nicolò Cangiotti & Mattia Sensi, 2023. "Exact solutions for a Solow-Swan model with non-constant returns to scale," Indian Journal of Pure and Applied Mathematics, Springer, vol. 54(4), pages 1278-1285, December.
    12. Serguei Kaniovski & Thomas Url & Helmut Hofer & Viola Garstenauer, 2021. "A Long-run Macroeconomic Model of the Austrian Economy (A-LMM 2.0). New Results (2021)," WIFO Studies, WIFO, number 67377, October.

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