ISSN:
1467-9787
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Geography
,
Economics
Notes:
. This paper investigates the resource allocational implications of intra-industrial externalities, i.e., variable returns to scale (VRS), in a two-region general equilibrium model of production under uncertainty. It is shown that most standard results concerning changes in the goods price ratio with constant returns to scale (CRS) under uncertainty generalize to VRS. In contrast, standard results concerning changes in factor endowments extend from CRS to decreasing returns to scale, but not to all permissible levels of increasing returns to scale. Thus, such theorems as factor price equalization and Rybczynski do not generalize to all real-world levels of VRS.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/j.1467-9787.1991.tb00160.x
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