The Consequence of the Modern Universal Growth Theory (MUGT) with respect to homogeneous degree 1 CES functions

Marcel R. de la Fonteijne

MPRA Paper from University Library of Munich, Germany

Abstract: In 2018 we adapted the implementation of technical growth to correct the Solow growth model. Within this article, we delve into some of the consequential aspects of this Modern Universal Growth Theory (MUGT) with respect to homogeneous degree 1 CES production functions. In particular, we demonstrate, that the well known Cobb Douglas and CES production functions can serve as the fi rst and second order approximation of any arbitrary production function, respectively. Furthermore, contrary to what you can find in literature, we show that technical progress in the MUGT is always labor saving. Also interesting is the point that even a negative elasticity of substitution is allowed.

Keywords: Capital and Labor Augmented Technical Progress, Growth Model, Maximum Profit Condition; Production Functions; General Technological Progress; Capital-Labor-mix; Estimation of the Elasticity of Substitution; DSGE; Total Factor Productivity; Solow model; Hicks; Harrod; Labor Saving (search for similar items in EconPapers)
JEL-codes: E00 E20 E23 E24 (search for similar items in EconPapers)
Date: 2023-09-22
New Economics Papers: this item is included in nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:118888

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