Inada conditions

A Cobb-Douglas-type function satisfies the Inada conditions when used as a utility or production function.

In macroeconomics, the Inada conditions, named after Japanese economist Ken-Ichi Inada,[1] are assumptions about the shape of a function, usually applied to a production function or a utility function. When the production function of a neoclassical growth model satisfies the Inada conditions, then it guarantees the stability of an economic growth path. The conditions as such had been introduced by Hirofumi Uzawa.[2]

  1. ^ Inada, Ken-Ichi (1963). "On a Two-Sector Model of Economic Growth: Comments and a Generalization". The Review of Economic Studies. 30 (2): 119–127. doi:10.2307/2295809. JSTOR 2295809.
  2. ^ Uzawa, H. (1963). "On a Two-Sector Model of Economic Growth II". The Review of Economic Studies. 30 (2): 105–118. doi:10.2307/2295808. JSTOR 2295808.