Abstract
There are numerous production functions that can be used in applied macroeconomic models. Here we consider the three most common ones: Cobb– Douglas, Constant Elasticity of Substitution (CES), and fixed coefficients, or Leontief, functions. We should mention also the so called returns to scale. The simplest case to consider in the analysis of macro models, for all types of production functions, is constant returns to scale, i.e. multiplying all inputs by a positive constant, thus keeping the ratios among all inputs unchanged, results in an output multiplied by the same constant.
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© 2008 Springer-Verlag Berlin Heidelberg
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(2008). Production Functions. In: Experimenting with Dynamic Macromodels. Lecture Notes in Economics and Mathematical Systems, vol 608. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-77397-9_3
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DOI: https://doi.org/10.1007/978-3-540-77397-9_3
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-77396-2
Online ISBN: 978-3-540-77397-9
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