ABSTRACT
Counterexamples often prove to be daunting obstacles to further research. Such was the case for two independent enquiries a quarter of a century ago as to the impact of price changes in commodity markets on the distribution of income. In the October 1969 issue of the International Economic Review, John Chipman provided a condition on distributive factor shares which, if satisfied for an economy with three factors of production engaged in producing in non-joint fashion three distinct commodities, sufficed to guarantee that any single commodity price rise would cause the return to the productive factor uniquely assigned to that sector to increase by relatively more than the commodity price. This he dubbed the weak form of the Stolper-Samuelson Theorem. However, Chipman also provided a counterexample to show that his condition would not be sufficient if the number of factors and goods were to equal four (Chipman 1969). A scant seven pages further on in this issue of the Review Murray Kemp and Leon Wegge (1969) also exhibited a counterexample for the case n = 4 to the proposition that their condition on ratios of factor shares would suffice to guarantee the strong form of the Stolper-Samuelson condition – a form in which a price rise causes all factors save the “intensive” one assigned to that sector to suffer losses in their returns.
