Necessary and Sufficient Conditions for Factor Price Equalization
AbstractAlthough models with factor price equalization are used frequently in both theoretical and applied research in international economics, only sufficient conditions for factor price equalization have been presented in the literature. In this paper, the authors present necessary and sufficient conditions for factor price equalization under quite general assumptions about the technologies of different countries. The necessary and sufficient conditions they derive are consistent with joint production, decreasing returns to scale, and substantive differences in the technologies and endowments of different countries. The authors' results enable them to reconcile the classical approach and the integrated equilibrium approach to factor price equalization. Copyright 1993 by The Review of Economic Studies Limited.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Economic Studies.
Volume (Year): 60 (1993)
Issue (Month): 2 (April)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527
Other versions of this item:
- BLACKORBY, Ch. & SCHWORM, W. & VENABLES, A., 1986. "Necessary and sufficient conditions for factor price equalization," CORE Discussion Papers 1986047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Xiang, C., 1999.
"The Sufficiency of the "Lens Conditions" for Factor Price Equalization in the Case of Two Factors,"
434, Research Seminar in International Economics, University of Michigan.
- Xiang, Chong, 2001. "The sufficiency of the 'lens condition' for factor price equalization in the case of two factors," Journal of International Economics, Elsevier, vol. 53(2), pages 463-474, April.
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- Andreas Pfingsten & Reiner Wolff, 2009. "Factor Supply Changes in Small Open Economies: Rybczynski Derivatives under Increasing Marginal Costs," Finnish Economic Papers, Finnish Economic Association, vol. 22(1), pages 9-20, Spring.
- Gordon H. Hanson & Matthew J. Slaughter, 1999. "The Rybczynski Theorem, Factor-Price Equalization, and Immigration: Evidence from U.S. States," NBER Working Papers 7074, National Bureau of Economic Research, Inc.
- Rick van der Ploeg & Anthony J Venables, 2010.
"Absorbing A Windfall Of Foreign Exchange: Dutch disease dynamics,"
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052, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
- van der Ploeg, Frederick & Venables, Anthony J., 2013. "Absorbing a windfall of foreign exchange: Dutch disease dynamics," Journal of Development Economics, Elsevier, vol. 103(C), pages 229-243.
- van der Ploeg, Frederick & Venables, Anthony J., 2010. "Absorbing A Windfall of Foreign Exchange: Dutch disease dynamics," CEPR Discussion Papers 8086, C.E.P.R. Discussion Papers.
- Falvey, Rod & Kreickemeier, Udo, 2005. "Globalisation and factor returns in competitive markets," Journal of International Economics, Elsevier, vol. 66(1), pages 233-248, May.
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