A CES Indirect Production Function / Boyan Jovanovic.

By:

Jovanovic, Boyan

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Technical Working Paper Series (National Bureau of Economic Research) ; no. t0188.Publication details: Cambridge, Mass. National Bureau of Economic Research 1995.Description: 1 online resource: illustrations (black and white)Online resources:

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Abstract: This paper derives an indirect production function that is, in a special case, of a constant elasticity of substitution form. This is not a contribution to the theory of aggregation generally. Instead it is a microfoundation for a specific but popular production function -- the CES -- that helps us express the important concept of the elasticity of substitution in terms of more primitive, and more intuitive concepts of the returns to scale. The paper presents a simple lemma, and then shows that several and diverse applications have a common logical structure: the production function often used in growth theory, the utility function when there is household production, human capital theory, and the concept of the aggregate technology shock.

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Working Paper	Biblioteca Digital	Colección NBER	nber t0188 (Browse shelf(Opens below))	Not For Loan

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October 1995.

This paper derives an indirect production function that is, in a special case, of a constant elasticity of substitution form. This is not a contribution to the theory of aggregation generally. Instead it is a microfoundation for a specific but popular production function -- the CES -- that helps us express the important concept of the elasticity of substitution in terms of more primitive, and more intuitive concepts of the returns to scale. The paper presents a simple lemma, and then shows that several and diverse applications have a common logical structure: the production function often used in growth theory, the utility function when there is household production, human capital theory, and the concept of the aggregate technology shock.