TY  - JOUR
AU  - Baldwin,Richard E.
TI  - The Stolper-Samuelson Theorem Reconsidered: An Example of Ricardian Dynamic Trade Effects
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3110
PY  - 1989
Y2  - September 1989
UR  - http://www.nber.org/papers/w3110
L1  - http://www.nber.org/papers/w3110.pdf
N1  - Author contact info:
Richard Baldwin
Cigale 2
1010 Lausanne
SWITZERLAND
Tel: 41-22-908-5900
E-Mail: rbaldwin@cepr.org
AB  - Standard trade theory views the capital stock as an endowment. However, trade policy can affect a country's steady-state capital stock. By ignoring the endogeneity of capital, standard analysis is incomplete and can be misleading. For instance, when capital in endogenous, the Stolper-Samuelson theorem incorrectly predicts the long-run impact of a tariff n factor rewards in a 2-by-2 trade model. Moreover, the output effects of a trade policy can be greatly amplified by its indirect effect on the steady-state capital stock. Since this indirect effect may take a very long time to be fully realized, trade policy can have a long-lasting effect on growth. Ricardo first studied this link between trade and steady-state factor supplies.
ER  -