Hicks-neutral technical change is change in the

production function In economics, a production function gives the technological relation between quantities of physical inputs and quantities of output of goods. The production function is one of the key concepts of mainstream neoclassical theories, used to define ...

of a business or industry which satisfies certain

economic neutrality An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...

conditions. The concept of Hicks neutrality was first put forth in 1932 by

John Hicks Sir John Richards Hicks (8 April 1904 – 20 May 1989) was a British economist. He is considered one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economic ...

in his book ''The Theory of Wages''. A change is considered to be Hicks neutral if the change does not affect the balance of labor and capital in the products'

. More formally, given the

Solow model Solow is a surname. Notable people with the surname include: * Alan Solow, an American lawyer and Jewish leader * Herbert Solow (journalist) (1903–1964), an American journalist * Herbert Franklin Solow (1931–2020), an American producer, directo ...

production function :

Y = A F(K,L) \,

, a Hicks-neutral change is one which only changes

A

See also

References

Further reading