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dc.contributor.authorLeón-Ledesma, Miguel A.en_US
dc.contributor.authorSatchi, Mathanen_US
dc.description.abstractWe 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.en_US
dc.publisherUniv. of Kent, School of Economics Canterburyen_US
dc.relation.ispartofseriesSchool of Economics discussion papers 11,13en_US
dc.subject.keywordbalanced growthen_US
dc.subject.keywordproduction techniqueen_US
dc.subject.keywordbiased technologyen_US
dc.subject.keywordelasticity of substitutionen_US
dc.titleThe choice of CES production techniques and balanced growthen_US
dc.typeWorking Paperen_US
Appears in Collections:School of Economics Discussion Papers, University of Kent

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