Revisiting the Stolper-Samuelson and Rybczynski Theorems with Production Externalities
AbstractBy using duality theory, this paper reexamines the validity of the Stolper-Samuelson and Rybczynski theorems with intra- and/or interindustrial externalities. In particular, the author states conditions for the validity of both theorems in terms of the patterns of production externalities and price-output responses. This paper also examines the second and third assumptions of R. W. Jones (1968) to show that they are equivalent without interindustrial externalities. With the assumption, the normal price-output response is a necessary and sufficient condition for the validity of the theorems, while without it, the normal price-output response is a necessary condition.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 27 (1994)
Issue (Month): 1 (February)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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- Henry Thompson, 1998. "Production with Two Factors and Many Goods Large Firms in a Small Open Economy," International Economic Journal, Taylor & Francis Journals, vol. 12(2), pages 107-116.
- Andreas Pfingsten & Reiner Wolff, 2009. "Factor Supply Changes in Small Open Economies: Rybczynski Derivatives under Increasing Marginal Costs," Finnish Economic Papers, Finnish Economic Association, vol. 22(1), pages 9-20, Spring.
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