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Keynes' User Cost and the Theory of International Trade

Koji Shimomura

Kobe Economic & Business Review, 1988, vol. 33, 63-73

Abstract: A unit-cost function is generated from the constant-returns technology in which exhaustible resources are indispensable as factors of production. It depends on expected as well as current factor prices. By using the unit-cost function, we construct a general equilibrium model involving exhaustible resources in terms of cost functions and examine how the expected variables may affect factor price, the outputs and the pattern of international trade.

Date: 1988
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