In this chapter we recapitulate the prototype models of chapters 2, 3, and 4 by adding to them smooth factor substitution in the place of fixed proportions in production. Our main findings will be that

• the Tobin prototype models (discussed in section 5.1) will generally be increased in their dynamic dimension by one, now exhibiting the dynamics of the (full employment) labor intensity in addition;

• the Keynes–Wicksell prototype model (discussed in section 5.2) will exhibit further stabilizing mechanisms by the inclusion of a neoclassical production function;

• the Keynesian model (discussed in section 5.3) will not be changed in its general qualitative features, still exhibiting underutilized labor as well as capital, even with the addition of a neoclassical production function.

We thus find that smooth factor substitution does not essentially modify the distinctions we have drawn between the three prototype models considered in the preceding chapters. It is worth highlighting this result in view of the fact that the fixed coeffcient assumption is often criticized in the literature for the narrowness of results it seems to imply. It is certainly true, however, that the addition of smooth factor substitution makes the models somewhat more complicated to handle due to the extra flexibility this substitution principle adds to them. The advantage of the assumption of fixed coeffcients in production therefore is to make the fundamental economic principles of each of these theories of monetary growth more transparent and more easily understandable.