The_Heckscher-Ohlin_Model__Lesson_23_

# The_Heckscher-Ohlin_Model__Lesson_23_ - Proof of Rybczynski...

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1 Lesson 23 1 Proof of Rybczynski theorem In this lesson, we “prove” the Rybczynski theorem The “proof” is by way of example, and is therefore not completely general Generalization requires more advanced mathematical techniques Lesson 23 2 Proof is strikingly similar to proof of Stolper-Samuelson The difference is that we work with full- employment conditions, rather than zero- profit conditions Lesson 23 3 Using standard notation, the full- employment conditions can be written: Labor used to produce X Labor used to produce Y Supply of Labor += L XX aQ L YY L + =

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2 Lesson 23 4 Using standard notation, the full- employment conditions can be written: Capital used to produce X Capital used to produce Y Supply of Capital += K XX aQ K YY K + = Lesson 23 5 As with the proof of Stolper-Samuelson, we now graph these two conditions Lesson 23 6 The full-employment condition for labor X Q Y Q LX La LY Slope = LX LY a a
3 Lesson 23 7 The full-employment condition for capital X Q Y Q KX Ka KY Slope = KX KY

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## This note was uploaded on 09/14/2009 for the course ECON 340 taught by Professor Leidholm during the Summer '08 term at Michigan State University.

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The_Heckscher-Ohlin_Model__Lesson_23_ - Proof of Rybczynski...

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