Econometrica: Jul 1966, Volume 34, Issue 3

Factor Market Distortions and the Shape of the Transformation Curve

https://doi.org/0012-9682(196607)34:3<686:FMDATS>2.0.CO;2-8
p. 686-698

Harry G. Johnson

It is shown geometrically and algebraically that a distortion in the factor market may make the transformation curve concave outward, either throughout or over a range, depending on the type of distortion. Also, computations are presented showing that it takes much factor market distortion to change the transformation curve appreciably.
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