Do Inada Conditions imply Cobb-Douglas Asymptotic Behavior or only a Elasticity of Substitution equal to one

Marcel R. de la Fonteijne

MPRA Paper from University Library of Munich, Germany

Abstract: Barelli and De Breu Passôa proved that Inada conditions imply asymptotic Cobb-Douglas behavior of the production function. This was corrected by Litina and Palivos by putting that only the elasticity of substitution is equal to one. We will correct both proof and arguments and come up with a proof without limitations, leaving the conclusion of Barelli unaltered but with a less restrictive proof. Furthermore if Inada conditions apply then the elasticity of substitution is bounded.

Keywords: Inada condition; production function; elasticity of substitution; Cobb-Douglas (search for similar items in EconPapers)
JEL-codes: E13 E23 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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