Holoreturns And Holothetic Invariance in Economics

Mughal, Adil Ahmad (2022): Holoreturns And Holothetic Invariance in Economics.

Abstract

Hicks neutral technical progress implies that in Y = AF(K, L) any technical progress only changes the technological knowledge, A, but does not af ect inputs and this is the Hicks-neutral holothetic result given by Sato in which the technical progress transforms into a scale ef ect without changing the map of isoquants to non-holothetic trajectory. This holothetic nature of production functions is possible under Lie-group like transformations with invariance properties for production functions under a given technical progress. This paper proposes a Farkas Lemma-like character of this holothetic transformation. Kostant's Convexity Theorem is a well-generalized result of convexity on Lie-group transformations concerning holotheticity. There's an 'equilibrium pricing' way found here for a convexity assumption implying 'holothetic invariance'.

• Item Type: MPRA Paper
• Language: English
• Keywords: Holotheticity, Homothetic technology, Economic Invariance, Lie groups, Transformation groups, Farkas' Lemma, Holoreturns, Idiosyncratic risk, Kostant Convexity
• Subjects: C - Mathematical and Quantitative Methods > C0 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C18 - Methodological Issues: General; D - Microeconomics > D4 - Market Structure, Pricing, and Design; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D46 - Value Theory; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty; G - Financial Economics > G0 - General; G - Financial Economics > G0 - General > G01 - Financial Crises

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