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Re: Barkley's comments, there is also an interesting paper by Semmler and Sieveking (don't
have the cite handy) that demonstrates reswitching-like results with discount rates for
interacting resources.  This does have relevance for environmental policy, as low discount
rates will not necessarily get results expected when analyzing a resource in isolation.
 
There is another 'relevance' of reswitching (and the more general case of reverse capital
deepening): for the sociology of the economics profession. Regardless of whether there are
escape hatches for neoclassical theory or the question of empirical relevance of the
phenomenon, the fact that one of the most esteemed economists of the twentieth century
(Samuelson) conceded defeat in a major journal, and the profession continued to use
aggregate production functions without comment in major subsequent research programs and
also declined to alter the basic curriculum, says something about the profession.
 
In my graduate training I was taught that the issue of the empirical relevance of
reswitching was neither relevant nor an issue.  The empirical relevance of a logical
inconsistency is not a scientific question.
 
Mat Forstater 
 
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