Cobb-Douglas Production Function

(1928)

Developed by American economist PAUL DOUGLAS (1892-1976) and mathematician CHARLES W. COBB.

Cobb-Douglas production function shows physical output as the Douglas labor and capital inputs; that is:

Q = AL^ΑK^b

where Q is output, A, α, b are constants, and L and K are labor and capital, respectively.

Capital can be interchanged with labor without affecting output.

COBB and DOUGLAS also suggested that the share of labor and of capital within an economy are relatively constant over time, although Cobb-Douglas production function was largely abandoned after 1961.

Also see: CES production function, input-output analysis, theory of production

Source:
P H Douglas, 'Are There Laws of Production?', American Economic Review, vol. XXXVIII (March, 1948), 1-41

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