Unconventional Results with S urrogate P roduction F unctions

Starting from S amuelson's famous 1962 S urrogate P roduction F unction, we show that some such functions are perfectly consistent with a ‘return of the machine type’. This is so when we introduce a distinctly conventional possibility—that of machine–labour substitution —instead of S amuelson's fixed proportions, within every technique. We also show that, in the presence of two primary inputs, the surrogate model can give distinctly unconventional primary input use/input price relations at the level of the consumer good industry, even if the rate of interest is identically null.