Appendix to Chapter 15

Giancarlo Gandolfo

Chapter Chapter 29 in International Trade Theory and Policy, 2014, pp 579-605 from Springer

Abstract: Abstract The constant-returns-to scale production functions for the tradable goods A, B and for the R&D services Z can be written in the intensive form (see Sect. 19.2.1) 29.1 $$\displaystyle{ \begin{array}{cl} A(t) & =\lambda (t)L_{A}g_{A}(\rho _{A}). \\ B(t)& =\lambda (t)L_{B}g_{B}(\rho _{B}), \\ Z & = L_{Z}g_{Z}(\rho _{Z}),\end{array} }$$ where $$\rho _{i} \equiv K_{i}/L_{i},i = A,B,Z$$ are the factor intensities in the three sectors, and λ(t) is an index of technological efficiency, assumed uniform for both tradables. The crucial assumption (Findlay, 1995) is that λ(t) is endogenously determined by the per-capita output of R&D services.

Keywords: Profit Rate; Unit Production Cost; Instantaneous Utility; Strategic Trade Policy; Subjective Discount Rate (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-642-37314-5_29

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DOI: 10.1007/978-3-642-37314-5_29

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