Inada conditions

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In macroeconomics, the Inada conditions (named after Japanese economist Ken-Ichi Inada) are ideal assumptions about the shape of a production function. The six conditions are:

  1. the value of the function at 0 is 0,
  2. the function is continuously differentiable,
  3. the function is strictly increasing in x,
  4. the derivative of the function is decreasing (thus the function is concave),
  5. the limit of the derivative towards 0 is positive infinity,
  6. the limit of the derivative towards positive infinity is 0.


References

Inada, Ken-Ichi 1963. “On a Two-Sector Model of Economic Growth: Comments and a Generalization,” The Review of Economic Studies, 30(2): 119-127


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