The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Non-substitution Theorems

  • Neri Salvadori
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1913

Abstract

A non-substitution theorem asserts that under certain specified conditions an economy will have one particular price structure for each admissible value of the profit rate, regardless of the pattern of final demand. The theorem has two forms. As first stated, it applies to an economy with single production and therefore no fixed capital (Arrow 1951; Koopmans 1951; Samuelson 1951; Levhari 1965). In its later formulation, some special joint products are considered to take account of fixed capital (Samuelson 1961; Mirrlees 1969; Stiglitz 1970).

Keywords

Joint production Non-substitution theorem Substitution 

JEL Classifications

D0 
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Bibliography

  1. Arrow, K.J. 1951. Alternative proof of the substitution theorem for Leontief models in the general case. In Activity analysis of production and allocation, ed. T.C. Koopmans. New York: Wiley.Google Scholar
  2. Koopmans, T.C. 1951. Alternative proof of the substitution theorem for Leontief models in the case of three industries. In Activity analysis of production and allocation, ed. T.C. Koopmans. New York: Wiley.Google Scholar
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  7. Stiglitz, J.E. 1970. Non-substitution theorems with durable capital goods. Review of Economic Studies 37: 543–552.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Neri Salvadori
    • 1
  1. 1.