Inada conditions asymptotically transform production function into the Cobb–Douglas

Ata Özkaya

Economics Letters, 2021, vol. 201, issue C

Abstract: This paper demonstrates that the result proposed in Barelli and Pessôa (2003) yields contradictions, making their main conclusion unproven and inconsistent. First, we correct the error of the authors. Second, we prove that imposing the Inada conditions on a production function inevitably transforms that function into the Cobb–Douglas production function whose parameters are endogenously determined by the original production function. Accordingly, we demonstrate that our results invalidate the interpretation of Litina and Palivos (2008), and we correct the erroneous conclusion of Litina and Palivos (2008).

Keywords: Inada conditions; Production function; Elasticity of substitution (search for similar items in EconPapers)
JEL-codes: E13 E23 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:201:y:2021:i:c:s016517652100063x

DOI: 10.1016/j.econlet.2021.109786

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