Factor Supply Changes in Small Open Economies: Rybczynski Derivatives under Increasing Marginal Costs
We discuss the validity of Rybczynski’s theorem under increasing marginal costs within firms or industries. In particular, we show that an extra supply of any factor may lead to an expansion of all sector outputs if at least one sector permits input substitution. We provide a corresponding necessary and sufficient condition. This condition can even be satisfied when the equilibrium is Walrasian and Marshallian stable. Our findings are also robust with respect to aggregate improvements in total factor productivity which raise the economy’s outputs beyond private returns.
Volume (Year): 22 (2009)
Issue (Month): 1 (Spring)
|Contact details of provider:|| Web page: http://www.taloustieteellinenyhdistys.fi|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Blackorby, Charles & Schworm, William & Venables, Anthony, 1993.
"Necessary and Sufficient Conditions for Factor Price Equalization,"
Review of Economic Studies,
Wiley Blackwell, vol. 60(2), pages 413-34, April.
- BLACKORBY, Ch. & SCHWORM, W. & VENABLES, A., 1986. "Necessary and sufficient conditions for factor price equalization," CORE Discussion Papers 1986047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Susanto Basu & John G. Fernald, 1994.
"Are apparent productive spillovers a figment of specification error?,"
International Finance Discussion Papers
463, Board of Governors of the Federal Reserve System (U.S.).
- Basu, Susanto & Fernald, John G., 1995. "Are apparent productive spillovers a figment of specification error?," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 165-188, August.
- Basu, S. & Fernald, J.G., 1993. "Are Apparent Productive Spillovers a Figment of Specification Error," Papers 93-22, Michigan - Center for Research on Economic & Social Theory.
- Susanto Basu & John G. Fernald, 1995. "Are Apparent Productive Spillovers a Figment of Specification Error?," NBER Working Papers 5073, National Bureau of Economic Research, Inc.
- Susanto Basu & John G. Fernald, 1996.
"Returns to scale in U.S. production: estimates and implications,"
International Finance Discussion Papers
546, Board of Governors of the Federal Reserve System (U.S.).
- Basu, Susanto & Fernald, John G, 1997. "Returns to Scale in U.S. Production: Estimates and Implications," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 249-83, April.
- Lindstrom, Tomas, 2000. " External Economies in Procyclical Productivity: How Important Are They?," Journal of Economic Growth, Springer, vol. 5(2), pages 163-84, June.
- Ide, Toyonari & Takayama, Akira, 1990. "Marshallian stability and long-run equilibrium in the theory of international trade with factor market distortions and variable returns to scale," Economics Letters, Elsevier, vol. 33(2), pages 101-108, June.
- 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.
- Burnside, Craig, 1996. "Production function regressions, returns to scale, and externalities," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 177-201, April.
- Caballero, Ricardo J. & Lyons, Richard K., 1992.
"External effects in U.S. procyclical productivity,"
Journal of Monetary Economics,
Elsevier, vol. 29(2), pages 209-225, April.
- Michael Benarroch, 1997. "Returns to Scale in Canadian Manufacturing: An Interprovincial Comparison," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 1083-1103, November.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- 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.
- Chang, Winston W, 1979. "Some Theorems of Trade and General Equilibrium with Many Goods and Factors," Econometrica, Econometric Society, vol. 47(3), pages 709-26, May.
- Jai-Young Choi, 1999. "Factor Growth, Urban Unemployment and Welfare Under Variable Returns to Scale," International Economic Journal, Taylor & Francis Journals, vol. 13(4), pages 17-34.
- Mayer, Wolfgang, 1974. "Variable Returns to Scale in General Equilibrium Theory: A Comment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 225-35, February.
- Caballero, Ricardo J. & Lyons, Richard K., 1990.
"Internal versus external economies in European industry,"
European Economic Review,
Elsevier, vol. 34(4), pages 805-826, June.
- Caballero, R.J. & Lyons, R.K., 1989. "Internal Versus External Economies In European Industry," Discussion Papers 1989_10, Columbia University, Department of Economics.
- Diewert, W E & Woodland, A D, 1977. "Frank Knight's Theorem in Linear Programming Revisited," Econometrica, Econometric Society, vol. 45(2), pages 375-98, March.
- Hansson, Gote & Lundahl, Mats, 1983. " The Rybczynski Theorem under Decreasing Returns to Scale," Scandinavian Journal of Economics, Wiley Blackwell, vol. 85(4), pages 531-40.
- Ide, Toyonari & Takayama, Akira, 1988. "Scale economies, perverse comparative statics results, the Marshallian stability and the long-run equilibrium for a small open economy," Economics Letters, Elsevier, vol. 27(3), pages 257-263.
- Knarvik, K.H.M. & Steen, F., 1997.
"Self-reinforcing Agglomerations? An empirical industry study,"
14/97, Norwegian School of Economics and Business Administration-.
- Knarvik, Karen Helene Midelfart & Steen, Frode, 1999. " Self-Reinforcing Agglomerations? An Empirical Industry Study," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 515-32, December.
- Oulton, Nicholas, 1996. "Increasing Returns and Externalities in UK Manufacturing: Myth or Reality?," Journal of Industrial Economics, Wiley Blackwell, vol. 44(1), pages 99-113, March.
- 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.
- Harrigan, James, 1995. "Factor endowments and the international location of production: Econometric evidence for the OECD, 1970-1985," Journal of International Economics, Elsevier, vol. 39(1-2), pages 123-141, August.
- Ruffin, Roy J., 1981. "Trade and factor movements with three factors and two goods," Economics Letters, Elsevier, vol. 7(2), pages 177-182.
- Jones, Ronald W. & Easton, Stephen T., 1983. "Factor intensities and factor substitution in general equilibrium," Journal of International Economics, Elsevier, vol. 15(1-2), pages 65-99, August.
- Jota Ishikawa, 1994. "Revisiting the Stolper-Samuelson and Rybczynski Theorems with Production Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 101-11, February.
When requesting a correction, please mention this item's handle: RePEc:fep:journl:v:22:y:2009:i:1:p:9-20. 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: (Editorial Secretary)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.