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Factor substitution and factor intensities in models with more factors than goods
Author(s) -
Wong Siukee
Publication year - 2005
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/j.1742-7363.2005.00017.x
Subject(s) - elasticity of substitution , substitution (logic) , economics , commodity , consumption (sociology) , econometrics , constant elasticity of substitution , production (economics) , factor price , elasticity (physics) , factor (programming language) , constant (computer programming) , simple (philosophy) , mathematical economics , relative price , microeconomics , thermodynamics , physics , computer science , market economy , social science , philosophy , epistemology , sociology , programming language
This paper considers the commodity prices–factor prices relation in models with more factors than consumption goods. Under some simple factor substitutability assumptions, many results in the n × n cases have counterparts in the l × n cases. The proportional price changes of the “middle factors” will be trapped between those of the “extreme factors”. A weak and a strong Stolper–Samuelson theorem can also be proven. If the numbers of goods and perfectly complementary factors are equal and the production functions have the nested constant elasticity of substitution form, two of the complementary factors would have the most extreme relative price changes, regardless of the factor intensities.