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Holoreturns And Holothetic Invariance in Economics

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

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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'.

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