On Seemingly Perverse Rybczynski Adjustments in Stable Equilibria
11 Pages Posted: 8 Oct 2005
Date Written: May 8, 2002
For a small open economy with decreasing returns to scale within industries, increasing any factor supply may increase all sector outputs. A necessary and sufficient condition for these seemingly perverse Rybczynski adjustments may even be satisfied for stable equilibria.
Keywords: Rybczynski theorem, stable equilibrium, decreasing returns to scale
JEL Classification: D50, F11
Suggested Citation: Suggested Citation