<p>The Rybczynski theorem is not directly applicable to the Melitz (2003) model, because the model the Rybczynski theorem is originating from, the Heckscher-Ohlin model, is built on different assumptions and focuses on different aspects of trade. The Heckscher-Ohlin model assumes that firms are identical within an industry and that there are constant returns to scale. In contrast, the Melitz model emphasizes firm heterogeneity and incorporates increasing returns to scale.</p>

CC BY-SA 4.0
2023-03-20T14:34:42.140Z
Thanks! In case you know, what would be the effect of an increase in the number of workers for melitz-type models?
Papayapap
CC BY-SA 4.0
2023-03-20T14:15:15.697Z
2023-03-20T14:15:15.697Z
Hans-Peter Schrei
<p>Does the <a href="https://en.wikipedia.org/wiki/Rybczynski_theorem" rel="nofollow noreferrer">Rybczynski theorem</a> also hold for modern Melitz (2003) type trade models?</p>

<international-trade><theory>
Does the Rybczynski theorem also hold in modern trade theory models?
Papayapap
# Does the Rybczynski theorem also hold in modern trade theory models?

(Asked by: username_0 on 2023-03-20)

Does the [Rybczynski theorem](https://en.wikipedia.org/wiki/Rybczynski_theorem) also hold for modern Melitz (2003) type trade models?

**Tags:** international-trade, theory


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## 1 answers

### Answer by username_1 on 2023-03-20. Score: 6 | Accepted answer

The Rybczynski theorem is not directly applicable to the Melitz (2003) model, because the model the Rybczynski theorem is originating from, the Heckscher-Ohlin model, is built on different assumptions and focuses on different aspects of trade. The Heckscher-Ohlin model assumes that firms are identical within an industry and that there are constant returns to scale. In contrast, the Melitz model emphasizes firm heterogeneity and incorporates increasing returns to scale.

> **Comments:**
> **username_0**: Thanks! In case you know, what would be the effect of an increase in the number of workers for melitz-type models?  

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