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Global Sensitivity of Neoclassical and Factor Proportions Models to Production Technology

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  • Jon Ford
  • Henry Thompson

Abstract

This paper pictures the global influence of various patterns of returns to scale in the general equilibrium model of production with two factors and two goods. Constant, increasing, and decreasing returns to scale at the sectoral level are explicitly specified. The changing slope and curvature of contract curves, isoquants, production frontiers, and relative price lines are examined under various Cobb-Douglas and exponential production functions. Fundamental properties of neoclassical and factory proportions theory are thus illustrated. [D50, F11]

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File URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000019
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Economic Journal.

Volume (Year): 11 (1997)
Issue (Month): 3 ()
Pages: 61-74

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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:61-74

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References

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  1. Panagariya, Arvind, 1980. "Variable returns to scale in general equilibrium theory once again," Journal of International Economics, Elsevier, vol. 10(4), pages 499-526, November.
  2. Horst Herberg & Murray C. Kemp, 1969. "Some Implications of Variable Returns to Scale," Canadian Journal of Economics, Canadian Economics Association, vol. 2(3), pages 403-415, August.
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Cited by:
  1. Hyeongwoo Kim & Henry Thompson, 2012. "Wages in a Factor Proportions Model with Energy Input," Auburn Economics Working Paper Series auwp2012-05, Department of Economics, Auburn University.
  2. Kim, Hyeongwoo & Thompson, Henry, 2009. "Factor Proportions Wages in a Structural Vector Autoregression," MPRA Paper 17798, University Library of Munich, Germany.
  3. Thompson, Henry, 2006. "The applied theory of energy substitution in production," Energy Economics, Elsevier, vol. 28(4), pages 410-425, July.

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