IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/113674.html
   My bibliography  Save this paper

The Stolper-Samuelson Trade Effects Trigger the Rybczynski Trade Effects Negatively

Author

Listed:
  • Guo, Baoping

Abstract

Most literature talks about trade effects of price changes on outputs in international economics as that a price increase of a good will lead to an expansion of the output of that good and a reduction in the output of the other good (see Bhagwati, Panagariya, and Srinivasan, 1998, p. 62). It only tells the story from the supply side. It is not in line with the fundamental economic principle, the law of demand, that says that there is an inverse (or negative) relationship between the price of a good (or service) and the quantity demanded. This study investigates it again based on the price-trade equilibrium from integrated world equilibrium (IWE). The paper shows that the overall result of supply and demand by the equilibrium is that a price increase of a good leads to a reduction in the output of that good and an increase in the output of another good. It is just a process of the Stolper-Samuelson trade effects negatively triggering the Rybczynski trade effects. The study proves the law of demand analytically.

Suggested Citation

  • Guo, Baoping, 2021. "The Stolper-Samuelson Trade Effects Trigger the Rybczynski Trade Effects Negatively," MPRA Paper 113674, University Library of Munich, Germany, revised Jul 2022.
    • Handle: RePEc:pra:mprapa:113674
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/113674/1/MPRA_paper_113674.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alan V. DEARDORFF, 2011. "Weak Links In The Chain Of Comparative Advantage," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 9, pages 59-71, World Scientific Publishing Co. Pte. Ltd..
    2. Helpman, Elhanan, 1984. "The Factor Content of Foreign Trade," Economic Journal, Royal Economic Society, vol. 94(373), pages 84-94, March.
    3. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    4. Alan V. Deardorff, 2011. "The possibility of factor price equalization, revisited," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 15, pages 155-163, World Scientific Publishing Co. Pte. Ltd..
    5. Fisher, Eric O'N., 2011. "Heckscher-Ohlin theory when countries have different technologies," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 202-210, April.
    6. Alan Woodland, 2013. "General Equilibrium Trade Theory," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 3, pages 39-87, Palgrave Macmillan.
    7. Jagdish Bhagwati & Arvind Panagariya & T. N. Srinivasan, 1998. "Lectures on International Trade, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522470, April.
    8. repec:bla:kyklos:v:25:y:1972:i:3:p:592-96 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:agr:journl:v:1(618):y:2019:i:1(618):p:159-168 is not listed on IDEAS
    2. Guo, Baoping, 2018. "World Equalized Factor Price and Integrated World Trade Space," MPRA Paper 92503, University Library of Munich, Germany, revised Feb 2019.
    3. Guo, Baoping, 2019. "World Equivalent Factor Endowments Determine Local Factor Rewards When Countries Have Different Productivities," MPRA Paper 94004, University Library of Munich, Germany.
    4. Guo, Baoping, 2019. "The Simplest Factor Price Non-Equalization When Countries Have Different Productivities," MPRA Paper 95015, University Library of Munich, Germany, revised 12 Jul 2019.
    5. Guo, Baoping, 2017. "World Resources Determine World Prices," MPRA Paper 91095, University Library of Munich, Germany, revised 13 Dec 2018.
    6. Baoping GUO, 2019. "Trade effects based on general equilibrium," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(618), S), pages 159-168, Spring.
    7. Daniel Bernhofen, 2010. "The Empirics of General Equilibrium Tade Theory: What Have we Learned?," CESifo Working Paper Series 3242, CESifo.
    8. Guo, Baoping, 2015. "General Trade Equilibrium of Integrated World Economy," MPRA Paper 94996, University Library of Munich, Germany, revised Feb 2019.
    9. Guo, Baoping, 2015. "Equalized Factor Price and Integrated World Equilibrium," MPRA Paper 92051, University Library of Munich, Germany, revised Feb 2019.
    10. Baoping Guo, 2023. "Integrated Price-Trade Equilibrium by World Factor Endowments," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 29(3), pages 193-205, August.
    11. Baoping Guo, 2024. "Leontief Paradox vs. Leontief Trade and Localized Factor Prices vs. Localized Trade Patterns," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 30(1), pages 83-105, February.
    12. Guo, Baoping, 2015. "Leontief Paradox Explored A New Trade Pattern When Countries Have Different Technologies," MPRA Paper 96929, University Library of Munich, Germany, revised Nov 2019.
    13. Lücke, Matthias, 1992. "Technischer Fortschritt und die Arbeitsteilung zwischen Industrie- und Entwicklungsländern: eine empirische Analyse," Open Access Publications from Kiel Institute for the World Economy 758, Kiel Institute for the World Economy (IfW Kiel).
    14. Daniel Bernhofen, 2007. "Predicting the Factor Content of Foreign Trade: Theory and Evidence," Discussion Papers 07/11, University of Nottingham, GEP.
    15. Porto, Guido G., 2003. "Trade reforms, market access, and poverty in Argentina," Policy Research Working Paper Series 3135, The World Bank.
    16. Lai, Huiwen & Zhu, Susan Chun, 2007. "Technology, endowments, and the factor content of bilateral trade," Journal of International Economics, Elsevier, vol. 71(2), pages 389-409, April.
    17. Jiandong Ju & Shang-Jin Wei, 2014. "A Solution to Two Paradoxes of International Capital Flows," Economic and Political Studies, Taylor & Francis Journals, vol. 2(1), pages 3-43, January.
    18. Paul Oslington & Isaac Towers, 2010. "Trade, Migration, and Inequality in a World without Factor Price Equalization," Review of International Economics, Wiley Blackwell, vol. 18(4), pages 650-662, September.
    19. Chakrabarti, Avik, 2004. "Asymmetric adjustment costs in simple general equilibrium models," European Economic Review, Elsevier, vol. 48(1), pages 63-73, February.
    20. Pi, Jiancai & Zhou, Yu, 2013. "Institutional quality and skilled–unskilled wage inequality," Economic Modelling, Elsevier, vol. 35(C), pages 356-363.
    21. Alan Deardorff, 2001. "Developing country growth and developed country response," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(4), pages 373-392.

    More about this item

    Keywords

    Factor price equalization; Heckscher-Ohlin Model; Equilibrium price; Trade Effects; General Trade Equilibrium;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:113674. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.