Abstract
This chapter discusses G-Neutral technical change, comparative statics, and integrability conditions. These are closely related to parametric changes under Lie groups and related transformations. Although these topics may appear to be entirely different, their fundamental formal structure shares the common property of transformations resulting from parametric changes in the economic system. The chapter also describes the theoretical foundations of various neutral types of technical progress that have frequently appeared in the economic literature. Of the several well-known types of technical progress that have appeared in economic literature over the years, the most frequently encountered is the Hicks neutral type. The chapter explores that the Lie type of technical progress under its own holothetic production function can always be expressed as a Hicks neutral type of product-augmenting technical progress. Under certain conditions, comparative static analysis of an equilibrium system can be carried out in a most efficient and systematic way using Lie groups and related concepts. The simultaneous holotheticity and compatibility conditions can alternatively be interpreted as the well-known integrability conditions in economic analysis.
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