Full formScience
VEBstands forVariable Elasticity of Substitution
Full Form of VEB
What is VEB?
Variable Elasticity of Substitution, commonly abbreviated as VEB or denoted by the Greek letter sigma in production functions, is a fundamental concept in microeconomics and macroeconomic theory that measures the degree to which one input or factor of production can be replaced by another while keeping output constant. Introduced in 1961 by economists Kenneth Arrow, Hollis Chenery, Bagicha Minhas, and Robert Solow, the VES production function improved upon the older Cobb-Douglas and constant elasticity models by allowing the substitution elasticity between capital and labour to vary across different stages of economic development. In India, the concept is widely taught across postgraduate economics programmes, Indian Institutes of Management, and School of Economics curricula, and it frequently appears in Union Public Service Commission, UGC NET, and RBI Grade B examinations. Researchers at institutions like the Indian Statistical Institute and ICRIER use VES functions to study factor substitution in Indian manufacturing and agriculture.
VEB का फुल फॉर्म
चर प्रतिस्थापन लोच
Example
The RBI research paper used a Variable Elasticity of Substitution framework to analyse how Indian industries substitute capital for labour over time.
VEB — frequently asked questions
What is the full form of VEB in economics?
VEB stands for Variable Elasticity of Substitution, a concept used in production functions to measure how easily one factor of production can replace another.
Who introduced the Variable Elasticity of Substitution model?
The Variable Elasticity of Substitution production function was introduced in 1961 by economists Kenneth Arrow, Hollis Chenery, Bagicha Minhas, and Robert Solow.
Is VEB important for UGC NET Economics exam?
Yes, VES or VEB is an important topic in UGC NET Economics as it appears under production theory and is frequently asked in both paper 1 and paper 2 sections.