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Adjustment in General Equilibrium: Some Industrial Evidence
Author(s) -
Rassekh Farhad,
Thompson Henry
Publication year - 1997
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00036
Subject(s) - general equilibrium theory , economics , competitive equilibrium , econometrics , capital (architecture) , production (economics) , applied general equilibrium , partial equilibrium , factors of production , mathematical economics , microeconomics , archaeology , history
The link between output changes and factor‐mix adjustments in general equilibrium is examined for each of nine industries using pooled data from 12 developed countries over the years 1970–85. Specifications of the Stolper‐Samuelson theorem and the specific‐factors model of production are built on the assumptions and structure of theory with each industry isolated in turn. In their simplest version with only capital and labor input, these competitive general‐equilibrium models explain a good deal of the observed variations in industrial factor mixes. The specific‐factors model performs better.