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The Allen--Uzawa elasticity of substitution for nonhomogeneous production functions

Elena Burmistrova and Sergey Lobanov

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Abstract: This note proves that the representation of the Allen elasticity of substitution obtained by Uzawa for linear homogeneous functions holds true for nonhomogeneous functions. It is shown that the criticism of the Allen-Uzawa elasticity of substitution in the works of Blackorby, Primont, Russell is based on an incorrect example.

Date: 2018-02
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Handle: RePEc:arx:papers:1802.06885