Economics Dictionary of ArgumentsHome
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| Endowments: In economics, "endowments" typically refer to the initial allocation of resources or factors of production that an individual or a country possesses. These can include a) Factor Endowments The quantities of land, labor (including human capital like skills), capital, and natural resources available to a country or firm. These influence comparative advantage and trade patterns, b) Initial Endowments (in consumer theory) The starting bundle of goods or assets an individual has before engaging in trade or consumption. See also Factors of production, Production._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Robert C. Feenstra on Endowments - Dictionary of Arguments
Feenstra I 1-27 Endowments/Feenstra: if endowments change, how do the industry outputs change? To answer this, we hold the product prices fixed (…). Feenstra I 1-30 International trade: (…) we assume(d) industry 1 to be labor-intensive. This implies that the share of the labor force employed in industry 1 exceeds the share of the capital stock used there, λ1L − λ1K > 0 , so that λ > 0 (…). Suppose further that the endowments of labor is increasing, while the endowments of capital remains fixed such that K = 0. (…) we see that the output of the labor-intensive industry 1 expands, whereas the output of industry 2 contracts. We have therefore established [the Rybczynski (1955)(1) Theorem]. >Rybczynski Theorem, >International trade. Feenstra I 1-34 With the economy fully specialized in good 1, factor prices are determined by the marginal products of labor and capital in that good, and the earlier “factor price insensitivity” Lemma no longer applies. >Factor price insensitivity. 1. Rybczynski, T.N., 1955, “Factor Endowments and Relative Commodity Prices,” Economica, 22, 336-341._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
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