Immiserizing Growth: Trade Expansion and Welfare Loss
Immiserizing growth explains how export expansion can reduce welfare when a severe terms-of-trade loss outweighs the gain from higher output.
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Specific Factors Model: Short-Run Trade Winners
Specific factors model analysis explains why trade creates clear short-run winners and losers when capital or land is tied to...
Lerner Diagram: Factor Prices in Trade Theory
Lerner diagram analysis shows how goods prices determine wages and capital returns through unit-value isoquants in trade theory.
Factor Price Equalization: Trade and Wage Convergence
Factor price equalization explains why trade can make wages and capital returns converge through goods prices, even when workers and...
Terms of Trade Economics: Prices and Welfare
Terms of trade economics explains how export prices, import prices, and trade purchasing power shape welfare in international trade.
Reciprocal Demand: Mill’s Trade Price Logic
Reciprocal demand explains how Mill’s trade theory determines the exact terms of trade inside the range created by comparative advantage.
Offer Curves: Reciprocal Demand and Terms of Trade
Offer curves explain how reciprocal demand determines the terms of trade and the volume of trade between two countries.
Sonnenschein-Mantel-Debreu Theorem: Aggregate Demand Limits
Sonnenschein-Mantel-Debreu theorem analysis shows why rational individual demand does not guarantee stable, unique, or well-behaved aggregate demand.
Stability of General Equilibrium: Price Convergence
Stability of general equilibrium explains when price adjustment converges toward market clearing and when cross-market feedback prevents convergence.
Existence of Competitive Equilibrium: Fixed Point Logic
Existence of competitive equilibrium explains how fixed point logic proves that market-clearing prices can exist under suitable general equilibrium assumptions.