Production with Two Factors and Many Goods Large Firms in a Small Open Economy
A tractable general equilibrium model of a small open economy producing many goods with two primary inputs is developed. Firms are large in that their output decisions affect their costs. One sector produces many different goods under variable costs, which arise through a link between output and the cost of the firm. Comparative static results depend on factor intensity and the degree of increasing costs. Some ambiguities arise in the comparative static adjustments associated with the sector producing the constant cost homogeneous good. [F1]
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Volume (Year): 12 (1998)
Issue (Month): 2 ()
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References listed on IDEAS
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- Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557-557.
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- 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.
- Rudiger Dornbusch & Stanley Fischer & Paul A. Samuelson, 1980. "Heckscher-Ohlin Trade Theory with a Continuum of Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 95(2), pages 203-224.
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