A NON-SUBSTITUTION THEOREM WITH HETEROGENEOUS LABOR

Abstract

The present paper shows that the Non-Substitution Theorem is actually constituted by two statements. The first one asserts that it is possible to find a finite number of production processes, one in each branch of the economy, in such a way that the elements of the convex cone spanned by such activities are all efficient. The second one asserts that it is possible to find a finite number of production processes, one in each branch of the economy, such that the set of efficient processes is contained in the convex cone spanned by such processes. The first statement is proven within more general structures than that of Leontief. The second one is proven within a modification of such structures that admits heterogeneous labor.