Cobb-Douglas Production Function

Y = A K^\alpha L^{1-\alpha}

Output from capital and labor with constant returns to scale exponent α.

By Charles Cobb, Paul Douglas

Social Sciences

1928 · Charles Cobb

Why it matters: Foundation of growth theory, macroeconomics, and development economics.

Discoverers: Charles Cobb, Paul Douglas (1928)

What does it mean?

Output from capital and labor with constant returns to scale exponent α.

Foundation of growth theory, macroeconomics, and development economics.

Symbol	Name	Unit	Meaning
$Y$	Output	—	GDP or production
$A$	TFP	—	Total factor productivity
$K$	Capital	—	Capital stock
$L$	Labor	—	Labor input
$α$	Capital share	—	Typically ~0.3

Double K and L with α=0.3 → Y increases by 2^1 = 2×.

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Y = A K^\alpha L^{1-\alpha}

Real-world impact

Global economy

Quantitative models shape markets and policy.

Photo: Unsplash — financial markets

Output from capital and labor with constant returns to scale exponent α.

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