"On the Cobb-Douglas and all that …": the Solow-Simon correspondence over the aggregate neoclassical production function

Abstract

The debate over the Cobb-Douglas production function has been raging ever since the mathematician Charles Cobb teamed up in 1928 with the economist Paul Douglas and developed this famous model of aggregate production and distribution. This article presents a heretofore unpublished exchange in 1971 over the efficacy of the Cobb-Douglas by two future Nobel Laureates, Robert Solow and Herbert Simon. Solow emerges as the defender of the Cobb-Douglas, and Simon the engaging critic. The correspondence demonstrates that the logical and empirical problems with the Cobb-Douglas were well known by the most advanced minds of mainstream economics. This calls into question the rationale for its continued use as an empirical corroboration of marginal productivity theory.

Keywords:

• aggregate production function
• Cobb-Douglas production function
• Herbert Simon
• Robert Solow