Economics Dictionary of ArgumentsHome
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| Cobb-Douglas production: The Cobb-Douglas production function is a mathematical model in economics that represents output as a function of labor and capital
Y= AKα Lβ
where Y is output, A is total factor productivity, K is capital, L is labor, and α,β are output elasticities, indicating input contributions. See also Production, Production function, CES Production function, Production theory, >Productivity, Elasticity._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Geoffrey C. Harcourt on Cobb-Douglas Production Function - Dictionary of Arguments
Harcourt I 69 Cobb-Douglas Production Function/Harcourt: [in the context of the discussion of technical progress:] (…) the available labour supply is allocated at each point of time over the existing vintages such that the marginal product of labour on each vintage is the same, equals the overall wage rate and total output is maximized. (The older is the vintage, the less labour-intensively will it be worked.) >Technical progress. Productivity: This viewpoint allows technical progress to affect the growth of labour productivity only when it is embodied via gross investment expenditure. Cobb-Douglas/Harcourt: We in fact use a more complex production function than Cobb-Douglas which Solow(1) used. The more complex function allows us to obtain a maximum average product and a minimum average cost for each vintage, and so, plants that can be scrapped. VsCobb-Douglas: With Cobb-Douglas, scrapping of this nature never occurs because the APs and MPs of all vintages go all the way from just above zero to just below infinity. Moreover, when the total labour force is distributed over the existing vintages so that the marginal product of labour is the same on each vintage, it is a further property of the Cobb-Douglas function that, provided that the exponents are the same for each vintage, the average product of labour will be the same on each also. 1. Solow, R. M. [1960] 'Investment and Technical Progress', Mathematical Methods in the Social Sciences 1959: Proceedings of the First Stanford Symposium, ed. by K. J. Arrow, S. Karlin, and P. Suppes (Stanford: Stanford University Press), pp. 89-104._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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