IDEAS home Printed from https://ideas.repec.org/a/eee/mateco/v46y2010i5p666-690.html
   My bibliography  Save this article

The geometry of global production and factor price equalisation

Author

Listed:
  • Ekeland, Ivar
  • Guesnerie, Roger

Abstract

We consider a production economy where commodities are partitioned into K irreproducible factors and L reproducible goods, and the production technologies have constant returns to scale. We examine the geometry of the global production set in the space of commodities, and we derive theorems of non-substitution type. We define the "factors values" of the different goods, we use them to characterize the efficient production plans, and we investigate in detail the relations between the prices of goods and the prices of factors. We show that the prices of factors uniquely determine the prices of goods, and that, generically, equalising the prices of 2K goods equalises the prices of factors.

Suggested Citation

  • Ekeland, Ivar & Guesnerie, Roger, 2010. "The geometry of global production and factor price equalisation," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 666-690, September.
  • Handle: RePEc:eee:mateco:v:46:y:2010:i:5:p:666-690
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304-4068(09)00138-4
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pierre-André Chiappori & Ivar Ekeland & Felix Kübler & Heracles M. Polemarchakis, 1999. "The Identification of Preferences from Equilibrium Prices," Working Papers hal-00598229, HAL.
    2. Neary, J Peter, 1985. "Two-by-Two International Trade Theory with Many Goods and Factors," Econometrica, Econometric Society, vol. 53(5), pages 1233-1247, September.
    3. Kubler, F. & Chiappori, P. -A. & Ekeland, I. & Polemarchakis, H. M., 2002. "The Identification of Preferences from Equilibrium Prices under Uncertainty," Journal of Economic Theory, Elsevier, vol. 102(2), pages 403-420, February.
    4. Kevin H. O'Rourke & Jeffrey G. Williamson, 1999. "The Heckscher-Ohlin Model Between 1400 and 2000: When It Explained Factor Price Convergence, When It Did Not, and Why," NBER Working Papers 7411, National Bureau of Economic Research, Inc.
    5. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
    6. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    7. Brown, Donald J & Matzkin, Rosa L, 1996. "Testable Restrictions on the Equilibrium Manifold," Econometrica, Econometric Society, vol. 64(6), pages 1249-1262, November.
    8. 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 909-935, October.
    9. Kehoe, Timothy J., 1982. "Regular production economies," Journal of Mathematical Economics, Elsevier, vol. 10(2-3), pages 147-176, September.
    10. Bidard, Christian, 1990. "An Algorithmic Theory of the Choice of Techniques," Econometrica, Econometric Society, vol. 58(4), pages 839-859, July.
    11. Travis, William P, 1972. "Production, Trade, and Protection When There are Many Commodities and Two Factors," American Economic Review, American Economic Association, vol. 62(1), pages 87-106, March.
    12. 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.
    13. Kehoe, Timothy J, 1983. "Regularity and Index Theory for Economies with Smooth Production Technologies," Econometrica, Econometric Society, vol. 51(4), pages 895-917, July.
    14. O'Rourke, Kevin H & Taylor, Alan M & Williamson, Jeffrey G, 1996. "Factor Price Convergence in the Late Nineteenth Century," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 499-530, August.
    Full references (including those not matched with items on IDEAS)

    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:eee:mateco:v:46:y:2010:i:5:p:666-690. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jmateco .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.