Possibility Theorems on Reswitching of Techniques and the Related Issues of Price Variations



Aftermath to a great debate called capital controversy over three decades ago, several seemingly useful results on production theory so far became familiar with us as given by Diewert (1982), Newman (1987), and others: GNP functions, Hotelling’s lemma and Shepard’s lemma. Intermediate microeconomic textbooks usually collect the topics, although these results would virtually be invalid in front of a combination of the use of intermediate goods like in the Sraffa–Leontief system and an introduction of joint-outputs, even if the neoclassical distribution principle were employed. Exception for the case is only a kind of the factor price equalisation theorems, as Woodland (1982) showed. Many economists, however, do not feel serious about those limitations of neoclassical production theory. We may wonder whether they have given up working with those subjects or discarded a theory of production.


Labour Input Intermediate Good Hyperbolic Mapping Asymptotic Line Factor Income 
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© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  1. 1.Faculty of CommerceChuo UniversityTokyoJapan

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