Advanced Search
MyIDEAS: Login to save this paper or follow this series

To Integrate with a High- Or Low-Wage Country: That is the Question

Contents:

Author Info

  • Choi, E. Kwan
Registered author(s):

    Abstract

    This paper considers the question of whether a country with the intermediate capital–laborratio is better off forming a free trade area with the higher or lower wage country. Typicalanalyses of gains from trade ignore the effects of free trade on factor prices. When Europe formsa free trade area with a high-wage economy, the equalized wage rises and rent declines, whilethe price of the importable declines. Workers unambiguously benefit, but integration has anambiguous effect on capitalists. However, consumers as a whole benefit from the integrationand workers can more than offset the losses of the capitalists. On the other hand, Europe'sintegration with a low-wage economy raises rent but lowers the wage and the price of thelabor-intensive good. Accordingly, capitalists unambiguously benefit, but integration has anambiguous effect on workers. Again, welfare of all consumers rises and the capitalists can morethan offset the losses of workers.

    Download Info

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Bibliographic Info

    Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 34998.

    as in new window
    Length:
    Date of creation: 01 Sep 2011
    Date of revision:
    Publication status: Published in International Review of Economics and Finance, Fourth Quarter 2011, vol. 20 no. 4, pp. 792-799
    Handle: RePEc:isu:genres:34998

    Contact details of provider:
    Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
    Phone: +1 515.294.6741
    Fax: +1 515.294.0221
    Email:
    Web page: http://www.econ.iastate.edu
    More information through EDIRC

    Related research

    Keywords: equalized facto prices; capital-labor ratio;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Chao, Chi-Chur & Laffargue, Jean-Pierre & Sgro, Pasquale M., 2012. "Environmental control, wage inequality and national welfare in a tourism economy," International Review of Economics & Finance, Elsevier, Elsevier, vol. 22(1), pages 201-207.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:isu:genres:34998. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephanie Bridges) The email address of this maintainer does not seem to be valid anymore. Please ask Stephanie Bridges to update the entry or send us the correct address.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.