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Does The Stolper-Samuelson Theorem Hold With Less Trade Distortion?: A Computable General Equilibrium

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  • Bittencourt, Maurício Vaz Lobo

Abstract

This paper examines the effects of agricultural trade policy changes in the Brazilian agriculture using CGE model. An extended Salter-Swan model is employed to verify if the Stolper-Samuelson theorem holds and the consequences in terms of prices, production and resources allocation. Results show that the Stolper-Samuelson hypothesis is reversed when imports and domestic goods are poor substitutes. The reduction in the import tariff increases national income, implying that inappropriate trade policy adjustments can stand in the way of promoting rapid and equitable growth of the economy.

Suggested Citation

  • Bittencourt, Maurício Vaz Lobo, 2003. "Does The Stolper-Samuelson Theorem Hold With Less Trade Distortion?: A Computable General Equilibrium," 2003 Annual meeting, July 27-30, Montreal, Canada 22173, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22173
    DOI: 10.22004/ag.econ.22173
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