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'''Hicks-neutral technical change''' is change in the [[production function]] of a business or industry which satisfies certain [[economic neutrality]] conditions. The concept of Hicks neutrality was first put forth in 1932 by [[John Hicks]] in his book ''The Theory of Wages''.<ref name=critical-assessments>{{Cite book | title = Sir John R. Hicks: Critical Assessments |author2=Woods, Ronald N. | year = 1989 | publisher = Routledge | isbn = 0-415-01272-4 | pages = 231 | url = {{Google books |plainurl=yes |id=bhccDLumYZ8C }} | author1 = Wood, John Cunningham|author-link1 = John Cunningham Wood}}</ref> A change is considered to be Hicks neutral if the change does not affect the balance of labor and capital in the products' [[production function]]. More formally, given the [[Solow model]] production function |
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'''Hicks-Neutral Technical Change''' Given a production function AF(K,L) changes in A are Hicks-neutral[http://economics.about.com/library/glossary/bldef-hicks-neutral.htm], meaning that they do not affect the optimal choice of K or L. [[Hicks-neutral]] technical change comes up in practice only for aggregate production functions. |
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:<math>Y = A F(K,L) \,</math>, |
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a Hicks-neutral change is one which only changes <math>A</math>.<ref name=about>{{Cite web | title = Hicks-Neutral/ Hicksian Neutrality | author = Mike Moffatt | publisher = About, Inc. | url = http://economics.about.com/library/glossary/bldef-hicks-neutral.htm | access-date = 2007-11-21 | archive-date = 2008-03-23 | archive-url = https://web.archive.org/web/20080323231627/http://economics.about.com/library/glossary/bldef-hicks-neutral.htm | url-status = dead }}</ref> |
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==See also== |
==See also== |
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*[[List of production functions]] |
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* [[Hicks-neutral]] |
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==References== |
==References== |
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{{Reflist}} |
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* [http://economics.about.com/library/glossary/bldef-hicks-neutral-technical-change.htm A Hicks-Neutral Technical Change] |
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* [http://ideas.repec.org/a/bep/mactop/v6y2006i2p1339-1339.html Hicks Neutral Technical Change Revisited: CES Production Function and Information of General Order] |
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==Further reading== |
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* {{cite book |first1=Edwin |last1=Burmeister |first2=A. Rodney |last2=Dobell |title=Mathematical Theories of Economic Growth |location=New York |publisher=Macmillan |year=1970 |pages=67–77 }} |
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* {{Cite book | title = The Theory of Wages | last = Hicks | first = John Richard | year = 1966 | publisher = St. Martins Press | url = https://books.google.com/books?id=6PdAAAAAIAAJ | orig-year = 1932 | isbn = 0-333-02764-7}} |
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* {{Cite journal | title = Hicks Neutral Technical Change Revisited: CES Production Function and Information of General Order | last = Dupuy | first = Arnaud | journal = Topics in Macroeconomics | year = 2006 | volume = 6 | issue = 2 | pages = 1339 | doi = 10.2202/1534-5998.1339 | s2cid = 201120907 | url = https://cris.maastrichtuniversity.nl/portal/en/publications/hicks-neutral-technical-change-revisited-ces-production-function-and-information-of-general-order(570c41a4-cdd3-462c-a51a-66efe55e9149).html }} |
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* {{Cite journal | title = Extended Hicks Neutral Technical Change | last = Blackorby | first = Charles |author2=Knox Lovell, C. A. |author3=Thursby, Marie C. | journal = The Economic Journal | volume = 86 | issue = 344 | date = December 1976 | pages = 845–852 | doi = 10.2307/2231457 | jstor = 2231457 | publisher = Blackwell Publishing}} |
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[[Category:Production economics]] |
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[[Category:Technological change]] |
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{{econ-stub}} |
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Latest revision as of 07:00, 18 December 2023
Hicks-neutral technical change is change in the production function of a business or industry which satisfies certain economic neutrality conditions. The concept of Hicks neutrality was first put forth in 1932 by John Hicks in his book The Theory of Wages.[1] A change is considered to be Hicks neutral if the change does not affect the balance of labor and capital in the products' production function. More formally, given the Solow model production function
- ,
a Hicks-neutral change is one which only changes .[2]
See also
[edit]References
[edit]- ^ Wood, John Cunningham; Woods, Ronald N. (1989). Sir John R. Hicks: Critical Assessments. Routledge. p. 231. ISBN 0-415-01272-4.
- ^ Mike Moffatt. "Hicks-Neutral/ Hicksian Neutrality". About, Inc. Archived from the original on 2008-03-23. Retrieved 2007-11-21.
Further reading
[edit]- Burmeister, Edwin; Dobell, A. Rodney (1970). Mathematical Theories of Economic Growth. New York: Macmillan. pp. 67–77.
- Hicks, John Richard (1966) [1932]. The Theory of Wages. St. Martins Press. ISBN 0-333-02764-7.
- Dupuy, Arnaud (2006). "Hicks Neutral Technical Change Revisited: CES Production Function and Information of General Order". Topics in Macroeconomics. 6 (2): 1339. doi:10.2202/1534-5998.1339. S2CID 201120907.
- Blackorby, Charles; Knox Lovell, C. A.; Thursby, Marie C. (December 1976). "Extended Hicks Neutral Technical Change". The Economic Journal. 86 (344). Blackwell Publishing: 845–852. doi:10.2307/2231457. JSTOR 2231457.
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