Abstract
In part I we have proved the nonsubstitution theorem. The proof rested on the uniqueness of the solution of the system of the price equations
for any given w, where φ was the unit cost function as a function of input prices. In the model where time enters into the production process the unit cost function changes to φ (\(\bar w\), r, p). But otherwise it keeps all relevant properties. For given r φi remains homogeneous of degree one in \(\bar w\) and p, and φi remains a strictly increasing function of \(\bar w\), if aoi is positive.
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References
P. A. Samuelson, A New Theorem on Non-Substitution, in: H.E.Hegland (ed.), Money, Growth and Methodology. Essays in Honor of J. Akerman Lund 1961, pp.407ff
J. A. Mirrlees, The Dynamic Non-Substitution Theorem, RES, Vol.36, 1969, pp.67ff
J. R. Hicks, Theory of Wages, London 1932, p.117 and p.245 (introduced the concept of elasticity of substitution)
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© 1971 Springer-Verlag Berlin · Heidelberg
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von Weizsäcker, C.C. (1971). The Dynamic Nonsubstitution Theorem. Generalization of the Elasticity of Substitution.. In: Steady State Capital Theory. Lecture Notes in Operations Research and Mathematical Systems, vol 54. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-80646-9_12
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DOI: https://doi.org/10.1007/978-3-642-80646-9_12
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-05582-2
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