Abstract
This paper shows that despite the presence of increasing returns to scale caused by public inputs in the specific factors economy, the production possibility frontier is still concave to the origin if the public input market is Marshall stable. It also shows that the symmetry assumption is a sufficient condition for the Marshallian stability. When international trade takes place, the symmetry assumptions can guarantee the validity of most but not all results of the standard specific factors model that are concerned with the effects of changes in terms of trade and factor endowments.
JEL Classification: C62, F14, H41
