Generalizing the Stolper–Samuelson Theorem: A Tale of Two Matrices

Author: Lloyd P.

Source: Review of International Economics, Volume 8, Number 4, November 2000 , pp. 597-613(17)

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Abstract:

Past attempts to generalize the Stolper–Samuelson theorem have used a matrix of real income terms which are sufficient but not necessary to define a change in utility. One can define a second matrix of terms which are necessary and sufficient for a change in indirect utility. Using this matrix, the paper extends the Stolper–Samuelson theorem to a model of any dimensions and to households which have diversified ownership of factors. The theorem states that there is a positive and a negative element in every row and every column of the matrix showing household responses to changes in goods prices.

Document Type: Original article

DOI: http://dx.doi.org/10.1111/1467-9396.00244

Affiliations: 1: University of Melbourne

Publication date: 2000-11-01