Naslov
Application of Lagrange Multipliers in the Analysis of the Stolper-Samuelson Theorem

Autori
Jošić, Hrvoje ; Jošić, Mislav

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Theory and Applications in the Knowledge Economy / Tomé, Eduardo ; Neumann, Gaby ; Knežević, Blaženka - Zagreb : Eduardo Tomé, Lisbon/Portugal (www.take‐conference.com) Faculty of Economics at the University of Zagreb and E4 Conferences, 2017, 682-693

Skup
TAKE 2017 – Theory and Applications in the Knowledge Economy

Mjesto i datum
Zagreb, Hrvatska, 12.07.2017. - 14.07.2017

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
Heckscher‐Ohlin theory, Stolper‐Samuelson theorem, Lagrange multipliers, tariffs

Sažetak
Stolper‐Samuelson theorem is basic theorem in international trade theory and provides analytical extension of Heckscher‐ Ohlin trade theory. This paper provides a theoretical proof of Stolper‐Samuelson theorem by introducing Lagrange multipliers while the problem of income optimization with more restrictions is tackled with the help of Karush‐ Kuhn‐Tucker's optimization conditions. Lagrange multipliers in model are wages and rents which represent shadow prices. The model analyzes the imposition of tariffs on an imported good and the impact of changes on factor prices. Assuming that technical coefficients of production and factor abundance are constant, optimum production remains the same. Final conclusions can be reduced to the claim that an increase in the price of one good leads to an above proportional increase of income of the production factor relatively intensively used in the production of good which price has changed, according to the Stolper‐Samuelson theorem.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA