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

Nakada, Yoshiaki (2015): Economy-wide substitution and Rybczynski sign pattern in a three-factor two-good model.

Abstract

In this article, we analyze how factor endowment affects production in the three-factor two-good general equilibrium trade model. These relationships determine whether ‘a strong Rybczynski result’ holds or not. We search for a sufficient condition for this result to hold (or not to hold). We assume factor intensity ranking is constant. We use ‘the economy-wide substitution’ (or EWS) and EWS-ratios to analyze Rybczynski sign pattern in a systematic manner. We also analyze Stolper-Samuelson sign pattern, which expresses the commodity price-factor price relationships.

• Item Type: MPRA Paper
• Language: English
• Keywords: three-factor two-good model; general equilibrium; Rybczynski result; economy-wide substitution.
• Subjects: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D58 - Computable and Other Applied General Equilibrium Models; F - International Economics > F1 - Trade > F11 - Neoclassical Models of Trade

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