Revisiting the Stolper-Samuelson and Rybczynski Theorems with Production Externalities
By 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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Volume (Year): 27 (1994)
Issue (Month): 1 (February)
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