# Validity of Rybczynski Theorem and Magnification Effect in Indian Scenario

Topics: Labor, Capital, Capital intensity Pages: 14 (3631 words) Published: September 2, 2011
Contents
1. RYBCZYNSKI THEOREM ............................................................................................................................. 3 1.1 Theorem: ............................................................................................................................................. 3 1.1.1 Graphical Proof ............................................................................................................................ 3 1.1.2 Mathematical Proof ..................................................................................................................... 3 1.2 Magnification effect: ........................................................................................................................... 6 1.2.1 Rank test: ..................................................................................................................................... 6 2. Summary: .................................................................................................................................................. 8 3. Description of data:................................................................................................................................... 9 4. Research design: ..................................................................................................................................... 12 4.1 Hypothesis: ....................................................................................................................................... 12 4.1.1 For Rank Test- ............................................................................................................................ 12 4.1.2 For Mathematical comparison-.................................................................................................. 12 5. Data support for the hypothesis ............................................................................................................. 14 5.1 Rank Test: .......................................................................................................................................... 14 5.2 Mathematical Comparison: .............................................................................................................. 16 6. Data Interpretations and calculations: ................................................................................................... 17 6.1 Rank test: .......................................................................................................................................... 17 6.2 Mathematical comparison: ............................................................................................................... 18 7.0 Result - Reasons for accepting the hypothesis: .................................................................................... 20 8. Bibliography: ........................................................................................................................................... 21 9.0 Appendix ............................................................................................................................................... 22 Exhibit 1a: Details on Gross Output, Total Capital and Total Workers for Labour Intensive Goods(X1) 22 Exhibit 1b: Details on Gross Output, Total Capital and Total Workers for Capital Intensive goods(X2) . 22 Exhibit 2: Goods production data ........................................................................................................... 23 Exhibit 3: Factor supply data ................................................................................................................... 24 Exhibit 4a: Capital Intensive Goods - WITS product group classification .............................................. 25 Exhibit 4b: Labour Intensive Goods - ICRIER Paper (1) ........................................................................... 26 Exhibit 5: Labour Force Data from CIA Factbook...