The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Reswitching of Technique

  • Roberto Scazzieri
Reference work entry


Reswitching of technique is the property whereby, when multiple production techniques are available in a wage–profit economy, the same technique may be optimal at different levels of the rate of interest. This means that a virtual movement of the rate of interest in a given direction might make it rational to use techniques that had been previously excluded, so that the rate of interest cannot provide an unambiguous ranking of techniques. This possibility is rooted in the complex interactions (movements of relative prices) that occur in a production economy with different proportions between labour and intermediate inputs.


Capital deepening Capital intensity Factor-price frontiers Intermediate products Recurrence of technique Reswitching of technique Technical choice 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Roberto Scazzieri
    • 1
  1. 1.