A Note on Shibata's Second Neutrality Theorem in an International Trade Model

The present note reconsiders Shibata's second neutrality theorem in a model that consists of two small countries, two tradable goods, and two primary factors of production. We demonstrate that the second neutrality theorem is valid under certain conditions; that is, to mitigate the negative effects of public bads, the governments must have direct control over the factors of production. Otherwise, the theorem does not hold in general.

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Year of publication:	2012
Authors:	Nakamura, Kazuyuki
Published in:	International Economic Journal. - Taylor & Francis Journals, ISSN 1016-8737. - Vol. 26.2012, 2, p. 219-228
Publisher:	Taylor & Francis Journals

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010623985