TY - JOUR
T1 - A note on the neoclassical ambiguity and the specific factor production model under variable returns to scale
AU - Mendez, Jose
PY - 1985/5
Y1 - 1985/5
N2 - This note investigates the relationship between commodity price changes and factor rewards in a specific factor production model that admits variable returns to scale. The principal result is that in the presence of variable returns to scale the so-called 'neoclassical ambiguity' may be resolved without resorting to detailed knowledge of the mobile factor's preferences. That is to say, the effect of a commodity price change may (as it does with the returns to those factors specific to each industry) raise or lower the real reward of the mobile factor in terms of either commodity, depending only on the characteristics of the technology.
AB - This note investigates the relationship between commodity price changes and factor rewards in a specific factor production model that admits variable returns to scale. The principal result is that in the presence of variable returns to scale the so-called 'neoclassical ambiguity' may be resolved without resorting to detailed knowledge of the mobile factor's preferences. That is to say, the effect of a commodity price change may (as it does with the returns to those factors specific to each industry) raise or lower the real reward of the mobile factor in terms of either commodity, depending only on the characteristics of the technology.
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U2 - 10.1016/0022-1996(85)90060-1
DO - 10.1016/0022-1996(85)90060-1
M3 - Article
AN - SCOPUS:46549096958
SN - 0022-1996
VL - 18
SP - 357
EP - 363
JO - Journal of International Economics
JF - Journal of International Economics
IS - 3-4
ER -