Variable Returns to Scale, Non-Uniqueness of Equilibrium and the Gains from International Trade.

Kemp, Murray C.; Schweinberger, Albert C.

Existing conditions for gainful trade under conditions of variables returns to scale are merely sufficient. Basing ourselves on the possible non-uniqueness of the productions equilibrium under variable returns, we develop a globally valid necessary and sufficient conditions for gainful trade. In particular, it is shown that trade may be gainful without changes in product prices, even if trade results in a loss of productivity.

INTERNATIONAL trade; ECONOMICS; EQUILIBRIUM; INTERNATIONAL economic relations; MATHEMATICAL variables; PRODUCTION (Economic theory); PRICES

Review of Economic Studies, 1991, Vol 58, Issue 4, p807

0034-6527

Academic Journal

10.2307/2297835