The Stolper–Samuelson theorem is a basic theorem in Heckscher–Ohlin trade theory. It describes the relationship between relative prices of output and relative factor rewards—specifically, real wages and real returns to capital.
The theorem states that—under specific economic assumptions (constant returns to scale, perfect competition, equality of the number of factors to the number of products)—a rise in the relative price of a good will lead to a rise in the real return to that factor which is used most intensively in the production of the good, and conversely, to a fall in the real return to the other factor
#stolpersamuelson #stolpersamuelsontheorem #internationaleconomics #internationaltrade #economicsoptional #economicswithdeepti
Do watch following lectures:
Stolper Samuelson(revision class): https://youtu.be/f2qfWLRB0sk?si=YPyyEPFif0osFOPz
Heckscher Ohlin: https://youtu.be/9Lozo545rXE?si=NGle7Zoa4cT3L7CX
