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The Consequence of the Modern Universal Growth Theory (MUGT) with respect to homogeneous degree 1 CES functions

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  • de la Fonteijne, Marcel R.

Abstract

In 2018 we adapted the implementation of technical growth to correct the Solow growth model. Within this article, we delve into some of the consequential aspects of this Modern Universal Growth Theory (MUGT) with respect to homogeneous degree 1 CES production functions. In particular, we demonstrate, that the well known Cobb Douglas and CES production functions can serve as the fi rst and second order approximation of any arbitrary production function, respectively. Furthermore, contrary to what you can find in literature, we show that technical progress in the MUGT is always labor saving. Also interesting is the point that even a negative elasticity of substitution is allowed.

Suggested Citation

  • de la Fonteijne, Marcel R., 2023. "The Consequence of the Modern Universal Growth Theory (MUGT) with respect to homogeneous degree 1 CES functions," MPRA Paper 118888, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118888
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    More about this item

    Keywords

    Capital and Labor Augmented Technical Progress; Growth Model; Maximum Profit Condition; Production Functions; General Technological Progress; Capital-Labor-mix; Estimation of the Elasticity of Substitution; DSGE; Total Factor Productivity; Solow model; Hicks; Harrod; Labor Saving;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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