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Economy-wide substitution and Rybczynski sign pattern in a three-factor two-good model: Further analysis

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  • Nakada, Yoshiaki

Abstract

The position of EWS-ratio vector determines Rybczynski sign pattern, and hence, Stolper-Samuelson sign pattern in a three-factor two-good general equilibrium trade model (see Nakada (2015)). EWS-ratio vector can be defined based on EWS (or economy-wide substitution). In this article, I develop a method to estimate the position of EWS-ratio vector to some extent. Especially, I derive a sufficient condition for extreme factors to be economy-wide complements. We assume factor intensity ranking is constant. The results suggest that if we have appropriate data, we can estimate the position of EWS-ratio vector to some extent. The results are useful for application.

Suggested Citation

  • Nakada, Yoshiaki, 2015. "Economy-wide substitution and Rybczynski sign pattern in a three-factor two-good model: Further analysis," MPRA Paper 67864, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:67864
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    References listed on IDEAS

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    1. Suzuki, Katsuhiko, 1983. "A synthesis of the heckscher-ohlin and the neoclassical models of international trade : A Comment," Journal of International Economics, Elsevier, vol. 14(1-2), pages 141-144, February.
    2. Batra, Raveendra N. & Casas, Francisco R., 1976. "A synthesis of the Heckscher-Ohlin and the neoclassical models of international trade," Journal of International Economics, Elsevier, vol. 6(1), pages 21-38, February.
    3. 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..
    4. Sato, Ryuzo & Koizumi, Tetsunori, 1973. "On the Elasticities of Substitution and Complementarity," Oxford Economic Papers, Oxford University Press, vol. 25(1), pages 44-56, March.
    5. Ruffin, Roy J., 1981. "Trade and factor movements with three factors and two goods," Economics Letters, Elsevier, vol. 7(2), pages 177-182.
    6. 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.
    7. Nakada, Yoshiaki, 2015. "Factor intensities and factor substitution in general equilibrium: A Comment," MPRA Paper 66758, University Library of Munich, Germany.
    8. Henry Thompson, 1985. "Complementarity in a Simple General Equilibrium Production Model," Canadian Journal of Economics, Canadian Economics Association, vol. 18(3), pages 616-621, August.
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    Cited by:

    1. Nakada, Yoshiaki, 2015. "Deriving the factor endowment-commodity output relationship for Thailand (1920-1929) using a three-factor two-good model," MPRA Paper 69654, University Library of Munich, Germany.

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    More about this item

    Keywords

    three-factor two-good model; general equilibrium; Rybczynski result; economy-wide substitution; Stolper-Samuelson sign pattern.;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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