THE NONSUBSTITUTION AND NONSWITCHING THEOREMS IN A MODEL WITH FIXED CAPITAL.
Abstract
Let a competitive economy produce commodities of varying durabilities, such that (a) production processes exhibit constant returns to scale; (b) there is one exogenous non-productible factor; (c) there are alternative techniques to produce each good; (d) it is possible to define conversion coefficients for old durable goods in terms of new goods of the same kind. Theorem: Let (A)-(d) hold. Then I: A long-run equilibrium of input-output coefficients and of prices in terms of wage units is uniquely determined for any preassigned value of the rate of interest. II: It is impossible to have identical techniques at different interest rates. This theorem generalizes Samuelson's static and dynamic nonsubstitution theorem. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 20, 1965
- Accession Number
- AD0622793
Entities
People
- Edwin Burmeister
- Eytan Sheshinski
Organizations
- Stanford University