Introducing Armington imperfect substitutability into Samuelson’s spatial price equilibrium model. The case of the French Forest Sector Model

Sylvain Caurla

No 2012-06, Working Papers - Cahiers du LEF from Laboratoire d'Economie Forestiere, AgroParisTech-INRA

Abstract: The French Forest Sector Model (FFSM) combines a spatial price equilibrium model à la Samuelson and an imperfect substitution assumption à la Armington for wood products between France and the Rest of the World. This paper aims at proving the existence and the conditions of equilibrium in FFSM. In particular, we show that, at equilibrium, (1) introducing Armington’s imperfect substitutability does not change Samuelson’s equilibrium conditions and that, (2) processing-industries make a positive profit if and only if they reach their production capacity limit.

Keywords: Spatial model; Partial equilibrium model; Economic equilibrium; Imperfect substitution; Forest model. (search for similar items in EconPapers)
JEL-codes: C62 F12 Q23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012-10, Revised 2012-10
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Persistent link: https://EconPapers.repec.org/RePEc:lef:wpaper:2012-06

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