NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

On Variable Capital Utilization and International Trade Theory

Lars E.O. Svensson

NBER Working Paper No. 992
Issued in September 1982
NBER Program(s):   ITI   IFM

The paper makes two points as to how standard international trade theory is modified when an endogenous degree of capital utilization is introduced. The first point is that, if capital utilization during a period is less than full because of an exogenous time-dependent variation in productivity within the period, there is no modification of the standard theory. In particular, there is no need to adjust capital-intensity estimates according to the degree of capital utilization. This is in contrast to what has been argued in the literature. The other point is that, if capital utilization is less than full because of higher wages during part of the period, the night of a day and night, say, the required modification of trade theory is that of introducing several kinds of labor and endogenous labor supply, or, equivalently, of introducing nontraded goods.

download in pdf format
   (87 K)

email paper

This paper is available as PDF (87 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0992

Published: Svensson, Lars E.O. "On Variable Capital Utilization and International Trade Theory." Economics Letters, Vol. 11, No. 4, (1983), pp. 377-384. citation courtesy of

 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us