Switching and employment

Abstract

The debate over the neoclassical theory of capital has provided an extensive array of models where the economy is divided between capital and consumption goods. The analytical framework for the discussion of the static factor-price frontier is therefore the same as that used to identify the dynamic properties of fixed coefficients two-sector growth models. This has been shown clearly in a recent book by Mukherji [7]. In this article I shall discuss the implications of this analytical structure for the employment capacity of such systems. I conclude that Pasinetti’s contribution constitutes a way out of the special case character of the results yielded by such models [8].