Abstract
In this paper we show that in a model with three goods (two traded goods and one nontraded good) and interindustry flows (1) Jones' magnification effects hold if and only if the marginal propensity to consume the nontraded good equals the average propensity, and (2) the condition implies that the factor movements bound the movement of the net output of the nontraded good, (3) which is equivalent to Jones' magnification effects. Furthermore, (4) the relation among various conditions is investigated, and (5) the results are extended to the many nontraded good case.
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