@techreport{Leon-Ledesma2011choice,
abstract = {We show that allowing firms a choice of CES production techniques (via the distribution parameter between capital and labor) can result in a new class of production functions that produces short-run capital-labor complementarity but yields a long-run unit elasticity of substitution. This is shown to occur if we provide a mathematical framework for this choice that maintains strict essentiality of the production process and satisfies the requirement of unit-invariance. The class of production functions derived are consistent with a balanced growth path even in the presence of capital-augmenting technical progress. The approach yields a simple yet powerful way of introducing CES-type production functions in macroeconomic models.},
address = {Canterbury},
author = {Miguel A. Le\'{o}n-Ledesma and Mathan Satchi},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {E25; O33; O40; 330; balanced growth; production technique; biased technology; elasticity of substitution},
language = {eng},
number = {11,13},
publisher = {Univ. of Kent, School of Economics},
title = {The choice of CES production techniques and balanced growth},
type = {School of Economics discussion papers},
url = {http://hdl.handle.net/10419/50623},
year = {2011}
}
