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A "generic", (general) Factor Price Equalisation Theorem

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Ivar Ekeland
Roger Guesnerie

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Abstract

We consider a constant returns to scale production sector, where goods are partitioned into factors and reproducible goods. We examine the geometry of the efficient frontier of the global production set and derive non substitution like theorems. Considering the supporting prices of the efficient frontier, we show that if the number of goods is at least twice larger than the number of factors, then, generically, the prices of goods univoquely determine the prices of factors. [Revised December 2006 as PSE working paper 2006-50: The geometry of global production and factor price equalisation] .

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Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2003-02.

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Date of creation: 2003
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Handle: RePEc:del:abcdef:2003-02

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  1. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-35, October. [Downloadable!] (restricted)
  2. Bidard, Christian, 1990. "An Algorithmic Theory of the Choice of Techniques," Econometrica, Econometric Society, vol. 58(4), pages 839-59, July. [Downloadable!] (restricted)
  3. Ethier, Wilfred J., 1984. "Higher dimensional issues in trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 3, pages 131-184 Elsevier. [Downloadable!] (restricted)
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