CES production function

LabourEcon

Consider a typical CES production function,

$$Y=[(A_{L}L{)}^{\rho }+(A_{H}H{)}^{\rho }{]}^{1/\rho }$$

here we would involve the typical parameter $\sigma$ , which is also equals to:

$$\rho =\frac{\sigma -1}{\sigma }$$

$\sigma$ denotes as the elasticity of substitution.