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Rybczynski theorem

The Rybczynski theorem was developed in 1955 by the Polish-born English economist Tadeusz Rybczynski (1923–1998). It states that at constant relative goods prices, a rise in the endowment of one factor will lead to a more than proportional expansion of the output in the sector which uses that factor intensively, and an absolute decline of the output of the other good. In the context of the Heckscher–Ohlin model of international trade, regions opened to trade often take the relative prices of goods as given. When there is a change in relative factor supply, the Rybczynski theorem explains the output changes and how factors are reallocated between the two sectors. In essence, both factors will move towards the sector that uses the factor that sees an increase in the relative supply more intensively, leading to a rise in output in this sector and an absolute decrease in output in the other sector. Eventually, across both countries, market forces would return the system toward equality of production in regard to input prices such as wages (the state of factor price equalization).

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Article summary

The Rybczynski theorem was developed in 1955 by the Polish-born English economist Tadeusz Rybczynski (1923–1998). It states that at constant relative goods prices, a rise in the endowment of one factor will lead to a more than proportional expansion of the output in the sector which uses that factor intensively, and an absolute decline of the output of the other good. In the context of the Heckscher–Ohlin model of international trade, regions opened to trade often take the relative prices of goods as given. When there is a change in relative factor supply, the Rybczynski theorem explains the output changes and how factors are reallocated between the two sectors. In essence, both factors will move towards the sector that uses the factor that sees an increase in the relative supply more intensively, leading to a rise in output in this sector and an absolute decrease in output in the other sector. Eventually, across both countries, market forces would return the system toward equality of production in regard to input prices such as wages (the state of factor price equalization).

Key claims

  1. date of birth: 1923 — source: Wikipedia · confidence 0.95

Discussion questions

  1. Summarise the article in your own words. Which single claim would you verify first, and why?
  2. The record states that the date of birth is "1923". What evidence would count against this claim?
  3. Which claim in this article is most likely to be revised as the sources update? How would you check its current status?
  4. If two sources disagreed about one of these facts, what would you need in order to trust one over the other?

Bibliography

  1. Wikipedia https://en.wikipedia.org/w/index.php?oldid=1322004750

Key claims and bibliography are generated from the same tracked claims and sources as the article page.