Capital theory and the Origins of the Elasticity of Substitution (1932-35)

Elasticity of substitution was introduced into economics during the early 1930s. It was discovered independently by Hicks in The Theory of Wages and by Joan Robinson in The Economics of Imperfect Competition, and then was the centre of a polemic involving Kahn and Sraffa, among others. The debate focused on imperfect competition and capital-theoretical issues. Some elements of the 1950s and 1960s capital theory controversy, such as the idea of capital as a Giffen good or the difficulties of measuring capital, were already discussed at this early stage. Copyright 2005, Oxford University Press.

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