Glossary of economics research
Results of search for Hicks-neutral follow:
Hicks-neutral:
An attribute of an effectiveness variable in a production function. The
attribute is that it does not affect labor differently from the way it affects
capital.
The canonical example is the Solow model production function Y=AF(K,L).
There Y is output, L labor, K capital, F a production variable, and A
represents some kinds of effectiveness variable. In Y=F(AK,L) the
effectiveness variable affects capital but not labor. In Y=F(K,AL) it affects
labor but not capital. These two cases can be described as Hicks-biased. In
Y=AF(K,L) it is Hicks-neutral.
Source: Romer, 1996, p 7, Hulten,
2000
Contexts: macro
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