Tag Archives | Stolper-Samuelson Theorem (SST)

The Stolper-Samuelson theorem (SST) simply suggests that, in any particular country, a rise in the relative (producer) prices of the labour intensive good will make labour better off and capital worse-off, and vice-versa, provided that some amount of each good is being produced. The SST of a Linear Model: Here we assume the economy produces two goods, labour and capital. [...]