Hicks-neutral technical progress

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Technical progress where with any given factor proportions the average and marginal products of all factors increase in the same proportion. Thus if Y = F(K, L), where Y is output, K is labour, and L is capital, and the function F(K, L) has constant returns to scale, output after Hicks-neutral technical progress where the productivity of each factor rises to λ > 1 times its former level is given by

Y* = FK, λL) = λF(K, L) = λY.

See also Harrod-neutral technical progress.

Subjects: Economics.

Reference entries