2018/05/16 by Yoshiaki Nakada, Nakada, Yoshiaki
Economics, Econometrics and Finance · #FOS: Economics and business #General Finance (q-fin.GN) #q-fin.GN
paper · pdf · doi:10.48550/arxiv.1805.06129
24 pages, 4 figures. arXiv admin note: substantial text overlap with arXiv:1711.11429, arXiv:1711.10096
arxiv created 2018/10/02 · arxiv updated 2018/10/04
The position of the EWS (economy-wide substitution)-ratio vector determines the Rybczynski sign pattern, which expresses the factor endowment--commodity output relationships, and the Stolper-Samuelson sign pattern, which expresses the commodity price--factor price relationships in a three-factor two-good general equilibrium trade model (see Nakada (2016a)). In this article, we show that the EWS-ratio vector exists on the line segment. Using this relationship, we develop a method to estimate the position of the EWS-ratio vector. We derive a sufficient condition for extreme factors to be economy-wide complements, which implies "a strong Rybczynski result." Additionally, we derive a sufficient condition for a specific Stolper-Samuelson sign pattern to hold. We assume factor-intensity ranking is constant. This article provides a basis for further applications.