Robustness of the Stolper-Samuelson Price Link
The Stolper-Samuelson theorem isolates conditions under which factor intensity determines the direction of factor price adjustments due to price changes in general equilibrium. The present chapter examines the robustness of this "intensity price link" under relaxations of its sufficient conditions, specifying parametric modifications of the comparative static model based on neoclassical production, competitive pricing, and full employment. To some extent, the intensity price link is robust to relaxations of its sufficient conditions.
Number of Pages in PDF File: 30
Keywords: Stolper-Samuelson theorem, robustness, factor intenstiy
JEL Classification: F1
Date posted: November 26, 2001
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