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Does Growth Encourage Factor Price Equalization ?
| Content Provider | Semantic Scholar |
|---|---|
| Author | Deardorff, Alan V. |
| Copyright Year | 2001 |
| Abstract | This paper first notes the importance of “one-cone” versus “multi-cone” equilibria in the Heckscher–Ohlin model of international trade, then asks whether economic growth in neoclassical growth models leads toward one or the other. The one-cone equilibrium arises with internationally similar factor endowments. It has a single set (cone) of relative factor endowments, within which countries diversify and have global factor price equalization (FPE) under free trade. The multi-cone equilibrium arises with larger factor endowment differences. It has FPE within cones, but not between them. The two configurations differ in important ways. The paper examines several neoclassical trade-and-growth models, distinguished by their assumptions about saving, asking whether factor endowments converge into a single cone. None of the models suggests convergence, while some strongly imply that countries will end up in different cones. This suggests a preference for the multi-cone version of the model. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://deepblue.lib.umich.edu/bitstream/handle/2027.42/71674/1467-9361.00116.pdf;jsessionid=B032E841F44B422419C9DD273B86B15C?sequence=1 |
| Language | English |
| Access Restriction | Open |
| Subject Keyword | Anomaly detection Converge Diversification (finance) F Factor Format-preserving encryption Kind of quantity - Equilibrium Large Note (document) Numerous Retinal Cone Steady state |
| Content Type | Text |
| Resource Type | Article |
