Preprint Article Version 1 This version is not peer-reviewed

Trade Effects Based on Trade Equilibrium

Version 1 : Received: 14 November 2018 / Approved: 16 November 2018 / Online: 16 November 2018 (07:57:27 CET)
Version 2 : Received: 27 February 2019 / Approved: 27 February 2019 / Online: 27 February 2019 (05:19:48 CET)

How to cite: Guo, B. Trade Effects Based on Trade Equilibrium. Preprints 2018, 2018110390 (doi: 10.20944/preprints201811.0390.v1). Guo, B. Trade Effects Based on Trade Equilibrium. Preprints 2018, 2018110390 (doi: 10.20944/preprints201811.0390.v1).

Abstract

The Rybczynski theorem describes the relationship between commodities and factor supplies, holding output price. By releasing holding commodity price, this paper introduces the trade effects of changes of factor endowments both on factor price and on commodity price. This is a study based on trade equilibrium. Technically, the study shows that change of factor endowments lead to a chain effect that Rybczynski’s trade effect triggers the Stolper-Samuelson’s trade effect. The analysis of this paper shows that economic activities, such as the change of factor endowments of any factor of any country reward another factor domestically and internationally. This is a tuneful circle. Trade brings a well-balanced development to the world.

Subject Areas

IWE; factor price equalization; heckscher-ohlin; equilibrium price; equalized factor price

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