Abstract:
The thesis that the number of mathematically possible switch points is reduced by the number of affected industries and by ambiguous price relations in the vicinity of the intersection points of wage curves must be supplemented by the condition of complete observability of the innovative technology. The rigorous proof that the number of switching points is reduced by conditions that can be regarded more realistic than the widely held theoretical view that two systems with alternative techniques differ, in general, at switch points in only one method of production could be an important step towards the empirical testing and practical application of the neo-Ricardian theory.
