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The CES production function was introduced to economics in the 1961 paper "Capital-Labor Substitution and Economic Efficiency," by Kenneth Arrow, Hollis Chenery, Bagicha Minhas, and Robert Solow. The paper had an immediate and substantial impact on economic research, and the CES production function remains an important tool for both theoretical and empirical researchers. I review how the CES production function was derived and used in the paper, and, relying on archival sources, present a fine-grained account of the collaborative process that produced the paper. I also discuss the CES production function as an example of multiple simultaneous discovery and suggest reasons for its broad and rapid diffusion.

ABSTRACTAn illustration of the ambiguities in the behaviour of a labour‐managed firm in the long run when both capital and labour are variable is provided by means of an example which can be completely solved. Input demand and output supply functions are derived from a suggested production function. The special case of a homothetic production function is yielded by one of five parameter sets identified.

Epstein and Spiegel (The Manchester School, Vol. 68 (2000), No. 5, pp. 503–515) have discussed a production function in which one input is inferior: an increase in the target level of output reduces the quantity of the input demanded. This paper provides a more straightforward proof that the input in question is inferior. This proof has the added advantage that, unlike the proof of Epstein and Spiegel, it is based on the firm's cost minimization problem. It thus emphasizes the connection between the firm's cost minimization problem and the issue of input inferiority. It is also shown that, if we treat the Epstein–Spiegel functional form as a utility function rather than a production function, then the inferior good can exhibit Giffen behavior.

AbstractWithin a general framework of production correspondences satisfying a set of weak axioms necessary and sufficient conditions for the existence of a joint production function are given. Without enforcing the strong disposability of inputs or outputs it is shown that a joint production function exists if and only if both input and output correspondences are strictly increasing along rays.

How much will our budget be cut be this year? This question has loomed ominously over regulatory agencies for over three decades. After the 2016 presidential election, it now stands front and center in federal policy, with the Trump administration pledging over $50 billion in cuts. Yet very little is known about the fundamental relationship between regulatory agencies' budgets and the social welfare outcomes they are charged to produce. Indeed, the question is scarcely studied in scholarship from law, economics, or political science. This article lays the groundwork for a new field of theoretical and empirical research, using what we call the "regulatory production function,†to understand the marginal effects of changes in regulatory agency budgets (both reductions and increases) on the levels of benefits they produce. Our proposed theoretical framework and empirical findings have important implications across the regulatory state on the relationship between agency funding and outcomes for public health, safety, and welfare agencies. This model of the regulatory state informs agency-scale decisions regarding institutional design and instrument choice as well as the broader set of decisions regarding the balance of federalism and reliance on private governance as a supplement to public authority. Part I describes relevant scholarship on the broad topic of regulatory agency resources and outcomes, showing a paucity of theoretical and empirical analysis of the question. Using the Environmental Protection Agency (EPA) and environmental quality as a case study, Part II develops a conceptual model of a regulatory production function for thinking more clearly about linkages between agency funding and regulatory outcomes. Using this model, Part III turns to generating hypotheses that could explain why EPA funding levels may or may not have a strong effect on environmental quality. Part IV uses regression analyses to test whether there is a statistically significant relationship between agency funding and air ...

The purpose of the study is to discuss consequences of pandemic events for estimating the economic growth mechanism in the European Union. The most recent COVID-19 growing death toll has drawn the attention to impact such unexpected, but not unprecedented situations have on society and economy. In the current study the focus is on estimating economic effects of a disease, which reduces the working population. It turns out that the prominent basic production function framework may fail to deliver consistent results, when analyzing transformation of labor and capital into output in all 27-EU Member countries. This is because of asymmetric impact of COVID-19 on each individual EU-country. A historical perspective on epidemic death toll shows that Europe experienced numerous periods of a similar demographic developments. Those were individual countries, regions, or most recently the whole continent (and the world) that suffered from outbreaks of a deadly disease. The paper offers a meta-analysis, and draws from numerous sources to provide as wide as possible coverage on population-decreasing events. Due to similarity in their economic consequences, information about death toll of wars and genocide cases supplements the narration. Conclusions draw the attention to the fact that in the post-COVID-19 era any growth related studies will suffer from the lack of time series that describe the new underlying transformation mechanism that is responsible for generating the GDP at country and EU-level. The contribution of the paper is in offering a point of reference for any future studies that will try to assess pandemic effects in regard to economic growth, economies of scale or any other production function framework element.

We build China's national production function based on national accounting data since 1997, when China primarily transformed from the Planned economy to Market. By proxying and measuring stocks of human capital(HC), physical capital and the efficiency units, as well as government expenditure reflecting total factor productivity(TFP), we analyze CES production functions' explanation effects by numerical simulation, and then according to the findings, choose Cobb-Douglas form for further research. Our results include, first, Cobb-Douglas production function in the form of capital coefficients - capital relative density, appropriately reflects Chinaâs recent input-output relationship. Second, taking factor-augmenting technical progress into consideration, the proxy settings for two capitals are empirically plausible for future research on Chinaâs endogenous growth model. Third, expansionary government expenditure negatively affects Chinaâs TFP and output.

Retail trade, an essential component in any industrialised marketing system, has received relatively little attention on a macro level. Rather, the formal study of retail trade has been directed at helping retail managers improve the effectiveness of their decisions. Although such analysis is helpful to retail managers, it is of less use to government policy makers in formulating policy and to marketing academicians in their attempts to understand retailing on a broader level. If the retailing sector of the economy is to be better understood some major analytical questions which revolve around the productivity of retail trade must be answered. Importantly, the productivity of retail trade is not only of interest to government policy makers but also should be of interest to marketers because (1) the productivity of retailing is a significant component in influencing the cost of marketing goods, (2) as marketers we know almost nothing about the economic efficiency of retailing, and (3) it will give marketers the tools to help compare productivity in the retailing/marketing sectors of the economy to productivity in other sectors of the economy. The purpose of this paper is the estimation of a production function for department stores in the United States for the year 1972. During 1972, department store sales totalled $51·08 billion[l], comprising 11·1% of all retail sales. Only automobile dealerships, eating and drinking places, and food stores were a greater component of retail sales and only the latter employed more people. An understanding of one of the more important components of the US economy, retail trade, cannot occur in the absence of a thorough comprehension of its department store component (SIC 531).