Arbeitspapier
The elasticity of derived demand, factor substitution and product demand: corrections to Hicks' formula and Marshall's four rules
Nearly 75 years ago, John Hicks introduced and formalized the concept of the elasticity of substitution between capital and labour and its relation to derived demand. The resulting formula has proven very useful in understanding the derived demand for productive factors, the distribution of factor incomes, and Marshall's Four Rules. This short paper notes that a slip occurred in the original derivation, presents a modified formula, and shows that Marshall's First Rule is no longer generally valid.
- Language
-
Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 1742
- Classification
-
Wirtschaft
Firm Behavior: Theory
Factor Income Distribution
Labor Demand
- Event
-
Geistige Schöpfung
- (who)
-
Chirinko, Robert S.
Mallick, Debdulal
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2006
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Chirinko, Robert S.
- Mallick, Debdulal
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2006
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