Robert Gulotty

The Stolper–Samuelson Theorem

An interactive exploration of how goods price changes magnify into factor price changes. From the PEIII course on international political economy.

Relative price change of good 1:

Production & Trade (goods space)

PPF
Autarky price
World price
Autarky IC
Trade IC

Factor Prices (unit-cost curves)

p1=c1
p2=c2
Shifted c1

Magnification Effect

When factor intensities are nearly equal, magnification becomes extreme.

Factor Intensities

Hat Algebra

0.30
0.70
0%