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Gains from trade theorem |
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Gains from trade theoremThe theoretical proposition that (in the absence of distortions) there will be gains from trade for any economy that moves from autarky to free trade, as well as for a small open economy and for the world as a whole if tariffs are reduced appropriately. Due to Samuelson (1939, 1962).Similar MatchesFirst theorem of welfare economicsFirst theorem of welfare economicsThe proposition of welfare economics that a competitive general equilibrium is Pareto optimal. A corollary is that free trade is Pareto optimal among countries. Heckscher-Ohlin TheoremHeckscher-Ohlin TheoremThe proposition of the Heckscher-Ohlin Model that countries will export the goods that use relatively intensively their relatively abundant factors. Central Limit TheoremCentral Limit TheoremThe Law of Large Numbers states that as a sample of independent, identically distributed random numbers approaches infinity, its probability density function approaches the normal distribution. See: Normal Distribution. Interest rate parity theoremInterest rate parity theoremExpression that the interest rate differential between two countries is equal to the difference between the forward foreign exchange rate and the spot rate. Coase TheoremCoase TheoremThe proposition that the allocation of property rights does not matter for economic efficiency, so long as they are well defined and a free market exists for the exchange of rights between those who have them and those who do not. Due to Coase (1960). Further SuggestionsHeckscher-Ohlin-Vanek TheoremSpot futures parity theorem Kemp-Wan Theorem Mutual fund theorem Rybczynski Theorem Factor Price Equalization Theorem Stolper-Samuelson Theorem Second theorem of welfare economics Two fund separation theorem Separation theorem Lerner Symmetry Theorem |
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