IDEAS home Printed from https://ideas.repec.org/a/ijb/journl/v1y2002i1p1-8.html
   My bibliography  Save this article

Inada Conditions and the Law of Diminishing Returns

Author

Listed:
  • Rolf Fare

    (Department of Economics, Oregon State University, U.S.A.)

  • Daniel Primont

    (Department of Economics, Southern Illinois University, U.S.A.)

Abstract

Inada (1963) provided properties of the production function that are useful in the study of economic growth. Shephard (1970a) provided an axiomatic approach to the study of production theory. He applied these axioms to give a formal statement of the law of diminishing returns [(Shephard, 1970b)]. In this paper we demonstrate that the Inada conditions and the law of diminishing returns, as articulated by Shephard, are fundamentally inconsistent. Thus one is forced to make a choice between the two models when studying productivity and growth.

Suggested Citation

  • Rolf Fare & Daniel Primont, 2002. "Inada Conditions and the Law of Diminishing Returns," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(1), pages 1-8, April.
  • Handle: RePEc:ijb:journl:v:1:y:2002:i:1:p:1-8
    as

    Download full text from publisher

    File URL: http://www.ijbe.org/table%20of%20content/pdf/vol1-1/01.pdf
    Download Restriction: no

    File URL: http://www.ijbe.org/table%20of%20content/abstract/Vol.1/No.1/01.htm
    Download Restriction: no

    References listed on IDEAS

    as
    1. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chatterjee, Partha & Shukayev, Malik, 2008. "Note on positive lower bound of capital in the stochastic growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 32(7), pages 2137-2147, July.

    More about this item

    Keywords

    production; growth;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ijb:journl:v:1:y:2002:i:1:p:1-8. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yi-Ju Su). General contact details of provider: http://edirc.repec.org/data/cbfcutw.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.