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A Brief History of Production Functions

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Abstract

This paper gives an outline of evolution of the concept and econometrics of production function, which was one of the central apparatus of neoclassical economics. It shows how the famous Cobb-Douglas production function was indeed invented by von Thünen and Wicksell, how the Constant Elasticity of Substitution (CES) production function was formulated, how the elasticity of substitution was made a variable and finally how Sato’s function incorporated biased technical changes. It covers almost all specifications proposed during 1950 to 1975, as well as the linear-exponential (LINEX) production functions and incorporation of energy as an input. The paper is divided into single product functions, joint product functions, and aggregate production functions. It also discusses the ‘capital controversy’ and its impacts.

Suggested Citation

  • S K Mishra, 2010. "A Brief History of Production Functions," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(4), pages 6-34, November.
  • Handle: RePEc:icf:icfjme:v:08:y:2010:i:3:p:6-34
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    Cited by:

    1. Romeo Ionescu, 2012. "Technical Progress as a Solution for Romania and Greece to Face the Global Crisis’ Problems and the Bad Forecasts," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 33-46.
    2. Catalin Angelo IOAN & Gina IOAN, 2014. "An analysis of the substitution effect and of revenue effect in the case of the consumer’s theory provided with an Allen utility function," The Journal of Accounting and Management, Danubius University of Galati, issue 3, pages 15-19, December.
    3. Alin Cristian Ioan, 2014. "A Study of Cobb-Douglas Production Function with Differential Geometry," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(6), pages 67-74, December.
    4. Catalin Angelo Ioan, 2010. "A Generalization of Some Production Functions," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 1(1), pages 110-123, March.
    5. Jakub Growiec & Jakub Muck, 2015. "Isoelastic Elasticity of Substitution Production Functions," Discussion Papers 15-13, University of Copenhagen. Department of Economics.
    6. Catalin Angelo Ioan, 2009. "The Production Functions from the Point of View of 3- Dimensional Geometry," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 1(1), pages 7-15, September.
    7. Frédéric Reynès, 2017. "The Cobb-Douglas function as a flexible function. Analysing the substitution between capital, labor and energy," Documents de Travail de l'OFCE 2017-12, Observatoire Francais des Conjonctures Economiques (OFCE).
    8. Rao, T.V.S. Ramamohan, 2011. "CES as an Organizational Production Function," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 46(1), pages 69-81.
    9. Paul E. Brockway & Harry Saunders & Matthew K. Heun & Timothy J. Foxon & Julia K. Steinberger & John R. Barrett & Steve Sorrell, 2017. "Energy Rebound as a Potential Threat to a Low-Carbon Future: Findings from a New Exergy-Based National-Level Rebound Approach," Energies, MDPI, Open Access Journal, vol. 10(1), pages 1-24, January.
    10. Paul E. Brockway & Matthew K. Heun & João Santos & John R. Barrett, 2017. "Energy-Extended CES Aggregate Production: Current Aspects of Their Specification and Econometric Estimation," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-23, February.
    11. Frédéric Reynès, 2011. "The cobb-douglas function as an approximation of other functions," Sciences Po publications 2011-21, Sciences Po.
    12. Verba, M., 2015. "Growth and innovation in the presence of knowledge and R&D accumulation dynamics," MERIT Working Papers 054, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    13. Frédéric Reynès, 2011. "The cobb-douglas function as an approximation of other functions," Working Papers hal-01069515, HAL.
    14. Saito Tetsuya, 2012. "How Do We Get Cobb-Douglas and Leontief Functions from CES Function: A Lecture Note on Discrete and Continuum Differentiated Object Models," Journal of Industrial Organization Education, De Gruyter, vol. 6(1), pages 1-13, December.
    15. Terheggen, Anne, 2010. "The new kid in the forest: the impact of China's resource demand on Gabon's tropical timber value chain," MPRA Paper 37982, University Library of Munich, Germany.
    16. Frédéric Reynès, 2017. "The Cobb-Douglas function as a flexible function: Analysing the sustitution between capital, labor and energy," Sciences Po publications 2017-04, Sciences Po.
    17. Alin Cristian Ioan & Catalin Angelo Ioan, 2011. "On The Nature of Level Hyper Surfaces in the Economic Theory," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 5(5), pages 143-149, October.
    18. Alexandra Naumenko & Seyyed Ali Zeytoon Nejad Moosavian, 2016. "Clarifying Theoretical Intricacies through the Use of Conceptual Visualization: Case of Production Theory in Advanced Microeconomics," Applied Economics and Finance, Redfame publishing, vol. 3(4), pages 103-122, November.
    19. Catalin Angelo Ioan & Gina Ioan, 2012. "An Analysis of the Substitution Effect and of Revenue Effect in the Case of the Consumer’s Theory Provided with a CES Utility Function," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 1(1), pages 164-175, March.
    20. Catalin Angelo Ioan & Gina Ioan, 2011. "A generalization of a class of production functions," Applied Economics Letters, Taylor & Francis Journals, vol. 18(18), pages 1777-1784, December.
    21. repec:dug:actaec:y:2017:i:2:p:248-259 is not listed on IDEAS
    22. H. Georg Schulze, 2010. "Ein Modell der Ekonomie als System von neuronalen Netzwerken - Ein Umriss
      [Connectionist Economics - An Outline]
      ," Post-Print hal-01492977, HAL.
    23. Catalin Angelo Ioan & Gina Ioan, 2016. "On Certain Conditions for Generating Production Functions - I," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(1), pages 129-150, February.
    24. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09i29kgilc0 is not listed on IDEAS
    25. T.V.S.Ramamohan Rao, 2011. "Contemporary Relevance and Ongoing Controversies Related to the CES Production Function," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(2), pages 36-57, July.

    More about this item

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)

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