Rybczynski Theorem Assignment Help

Assignment Help: >> Heckscher-ohlin theorem - Rybczynski Theorem

Rybczynski Theorem:

The Rybczynski theorem demonstrates the relationship between  changes in national factor endowments and changes  in the outputs  of  the final goods within the context of  the H-0 model. Briefly stated, according to  this theorem an increase  in a country's endowment of a factor will cause an increase in output of the good, which uses that factor intensively, and a decrease in the output of the other good.  In  other words,  if  India  experiences an  increase  in  labour supply, then  that would  cause an  increase in output of the  labour-intensive goods, like textiles, and a decrease in  the output of the capital-intensive goods, like electronics. The reverse is true if the economy's  capital stock increases. The theorem  is useful  in addressing issues such is  investment, population growth, labour force growth, immigration and emigration, all within the con- text of the H-0 model.  

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