homogeneous of degree zero

Definitions

Economics

  • The property of a function that, if you scale all arguments by the same proportion, the value of the function does not change. See homogeneous of degree N. In the H-O Model, CRTS production functionsimply that marginal products have this property, which is critical for FPE.
  • abbreviationzero degree homogeneous
    (written as Homogeneous of degree zero)
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