IDEAS home Printed from https://ideas.repec.org/a/agr/journl/vxxviy2019i1(618)p159-168.html
   My bibliography  Save this article

Trade effects based on general equilibrium

Author

Listed:
  • Baoping GUO

    (College of West Virginia, USA)

Abstract

The Rybczynski theorem describes the trade effect within production analyses between factor endowments and outputs. The Stolper-Samuelson theorem focuses on cost analyses between factor reward and commodity price. This paper examines the trade effect of changes of factor endowments on prices, based on general equilibrium. The study shows that changes of factor endowments cause domestic output changes (the Rybczynski effect), which affect output prices and factor prices (the Stolper-Samuelson effect). It is like a chain of effects that the Rybczynski’s trade effect triggers the Stolper-Samuelson’s trade effect. The analysis of this paper shows that a small increase of a factor endowment of any country rewards another factor and the commodity using the latter factor intensively. It displays a tuneful circle. Trade brings a well-balanced development to the world.

Suggested Citation

  • Baoping GUO, 2019. "Trade effects based on general equilibrium," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(618), S), pages 159-168, Spring.
    • Handle: RePEc:agr:journl:v:xxvi:y:2019:i:1(618):p:159-168
    as

    Download full text from publisher

    File URL: http://store.ectap.ro/articole/1381.pdf
    Download Restriction: no
    File URL: http://www.ectap.ro/articol.php?id=1381&rid=134
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), 2013. "Palgrave Handbook of International Trade," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-30531-1.
    2. Alan V. DEARDORFF, 2011. "Weak Links In The Chain Of Comparative Advantage," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 9, pages 59-71, World Scientific Publishing Co. Pte. Ltd..
    3. Peter K. Schott, 2003. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production," American Economic Review, American Economic Association, vol. 93(3), pages 686-708, June.
    4. Alan V. Deardorff, 2011. "The possibility of factor price equalization, revisited," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 15, pages 155-163, World Scientific Publishing Co. Pte. Ltd..
    5. Chipman, John S, 1969. "Factor Price Equalization and the Stolper-Samuelson Theorem," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(3), pages 399-406, October.
    6. Helpman, Elhanan, 1984. "The Factor Content of Foreign Trade," Economic Journal, Royal Economic Society, vol. 94(373), pages 84-94, March.
    7. Henry Thompson, 2000. "Economic Integration," World Scientific Book Chapters, in: International Economics Global Markets and International Competition, chapter 9, pages 298-334, World Scientific Publishing Co. Pte. Ltd..
    8. Alan Woodland, 2013. "General Equilibrium Trade Theory," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 3, pages 39-87, Palgrave Macmillan.
    9. Baoping Guo, 2005. "Endogenous Factor-Commodity Price Structure by Factor Endowments," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(4), pages 484-484, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guo, Baoping, 2019. "World Equivalent Factor Endowments Determine Local Factor Rewards When Countries Have Different Productivities," MPRA Paper 94004, University Library of Munich, Germany.
    2. Guo, Baoping, 2019. "The Simplest Factor Price Non-Equalization When Countries Have Different Productivities," MPRA Paper 95015, University Library of Munich, Germany, revised 12 Jul 2019.
    3. Agyeman, Domena A. & Ochuodho, Thomas O., 2021. "Factor endowment and structural change in Kentucky forest industry," Forest Policy and Economics, Elsevier, vol. 131(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guo, Baoping, 2017. "World Resources Determine World Prices," MPRA Paper 91095, University Library of Munich, Germany, revised 13 Dec 2018.
    2. Guo, Baoping, 2018. "World Equalized Factor Price and Integrated World Trade Space," MPRA Paper 92503, University Library of Munich, Germany, revised Feb 2019.
    3. repec:agr:journl:v:1(618):y:2019:i:1(618):p:159-168 is not listed on IDEAS
    4. Guo, Baoping, 2019. "The Simplest Factor Price Non-Equalization When Countries Have Different Productivities," MPRA Paper 95015, University Library of Munich, Germany, revised 12 Jul 2019.
    5. Guo, Baoping, 2019. "World Equivalent Factor Endowments Determine Local Factor Rewards When Countries Have Different Productivities," MPRA Paper 94004, University Library of Munich, Germany.
    6. Guo, Baoping, 2015. "General Trade Equilibrium of Integrated World Economy," MPRA Paper 94996, University Library of Munich, Germany, revised Feb 2019.
    7. Guo, Baoping, 2015. "Equalized Factor Price and Integrated World Equilibrium," MPRA Paper 92051, University Library of Munich, Germany, revised Feb 2019.
    8. Daniel Bernhofen, 2010. "The Empirics of General Equilibrium Tade Theory: What Have we Learned?," CESifo Working Paper Series 3242, CESifo.
    9. Guo, Baoping, 2021. "The Stolper-Samuelson Trade Effects Trigger the Rybczynski Trade Effects Negatively," MPRA Paper 113674, University Library of Munich, Germany, revised Jul 2022.
    10. Lai, Huiwen & Zhu, Susan Chun, 2007. "Technology, endowments, and the factor content of bilateral trade," Journal of International Economics, Elsevier, vol. 71(2), pages 389-409, April.
    11. Kazuhiro Kurose & Naoki Yoshihara, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Working Papers SDES-2018-17, Kochi University of Technology, School of Economics and Management, revised Nov 2018.
    12. Guo, Baoping, 2015. "Leontief Paradox Explored A New Trade Pattern When Countries Have Different Technologies," MPRA Paper 96929, University Library of Munich, Germany, revised Nov 2019.
    13. Kurose, Kazuhiro & Yoshihara, Naoki, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Discussion Paper Series 686, Institute of Economic Research, Hitotsubashi University.
    14. James Harrigan, 2001. "Specialization and the Volume of Trade: Do the Data Obey the Laws?," NBER Working Papers 8675, National Bureau of Economic Research, Inc.
    15. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2001. "Factor Price Equality and the Economies of the United States," NBER Working Papers 8068, National Bureau of Economic Research, Inc.
    16. Daniel Bernhofen, 2007. "Predicting the Factor Content of Foreign Trade: Theory and Evidence," Discussion Papers 07/11, University of Nottingham, GEP.
    17. Fisher, Eric O'N., 2011. "Heckscher-Ohlin theory when countries have different technologies," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 202-210, April.
    18. Batista, Catia & Potin, Jacques, 2008. "International Specialization and the Return to Capital, 1976-2000," ESSEC Working Papers DR 08001, ESSEC Research Center, ESSEC Business School.
    19. Catia Batista & Jacques Potin, 2007. "Stages of diversification and specialization in an Heckscher-Ohlin world, 1976-2000," Economics Series Working Papers 356, University of Oxford, Department of Economics.
    20. Reimer, Jeffrey J., 2006. "Global production sharing and trade in the services of factors," Journal of International Economics, Elsevier, vol. 68(2), pages 384-408, March.
    21. Melise Jaud & Madina Kukenova & Martin Strieborny, 2018. "Finance, Comparative Advantage, and Resource Allocation," Review of Finance, European Finance Association, vol. 22(3), pages 1011-1061.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:agr:journl:v:xxvi:y:2019:i:1(618):p:159-168. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marin Dinu (email available below). General contact details of provider: https://edirc.repec.org/data/agerrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.