The Origins of the CES Production Function

Abstract

The CES production function was introduced to economics in the 1961 paper “Capital-Labor Substitution and Economic Efficiency,” by Kenneth Arrow, Hollis Chenery, Bagicha Minhas, and Robert Solow. The paper had an immediate and substantial impact on economic research, and the CES production function remains an important tool for both theoretical and empirical researchers. I review how the CES production function was derived and used in the paper, and, relying on archival sources, present a fine-grained account of the collaborative process that produced the paper. I also discuss the CES production function as an example of multiple simultaneous discovery and suggest reasons for its broad and rapid diffusion.