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Factor-Intensity Reversals under Monopolistic Competition

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  • Torstensson, Johan

Abstract

This paper shows that it is impossible to rule out factor-intensity reversals (FIRs) under monopolistic competition unless production functions are homothetic. We construct a simple example where the capital-intensity at unchanged output is fixed, but where FIRs still can occur because equilibrium output and thus the average capital-intensity depends on the wage-rental ratio. Copyright 1996 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

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  • Torstensson, Johan, 1996. "Factor-Intensity Reversals under Monopolistic Competition," Bulletin of Economic Research, Wiley Blackwell, vol. 48(2), pages 129-136, April.
    • Handle: RePEc:bla:buecrs:v:48:y:1996:i:2:p:129-36
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    Cited by:

    1. Hiroshi Goto, 2015. "Inter-Industrial Factor Allocation in the Short and Long Runs in Chamberlinian Monopolistic Competition," Discussion Paper Series DP2015-36, Research Institute for Economics & Business Administration, Kobe University.

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