On The Likelihood Of Factor Price Equalization With Nontraded Goods
AbstractIt is argued that nontraded goods reduce the likelihood of factor price equalization. Specifically, the addition of nontraded goods to a small, open-economy Heckscher-Ohlin model with any number of goods reduces the size of the cone of diversification by the fraction of income spent on nontraded goods. This in turn may be regarded as reducing by a comparable amount the likelihood that a country's factor endowments will lie within that cone and, thus, the likelihood of factor price equalization. Copyright 1990 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 241.
Length: 9 pages
Date of creation: 1989
Date of revision:
pricing ; international trade ; economic models;
Other versions of this item:
- Deardorff, Alan V & Courant, Paul N, 1990. "On the Likelihood of Factor Price Equalization with Nontraded Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(3), pages 589-96, August.
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- Anderson, James E. & Martin, Will, 2010.
"Costs of taxation and benefits of public goods with multiple taxes and goods,"
Policy Research Working Paper Series
5410, The World Bank.
- James E. Anderson & Will Martin, 2011. "Costs of Taxation and Benefits of Public Goods with Multiple Taxes and Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(2), pages 289-309, 04.
- James E. Anderson & Will Martin, 2010. "Costs of Taxation and Benefits of Public Goods with Multiple Taxes and Goods," Boston College Working Papers in Economics 731, Boston College Department of Economics.
- Glenn Rayp, 1998. "An empirical test of the Dixit-Norman approach to factor price equalization, using cointegration techniques," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 134(3), pages 484-512, September.
- Peter Debaere & Ufuk Demiroglu, 2003. "Factor Accumulation Without Diminishing Returns: The Case of East Asia: Technical Paper 2003-11," Working Papers 15113, Congressional Budget Office.
- Adrian Wood (ODID), . "A more general Heckscher-Ohlin model," QEH Working Papers qehwps185, Queen Elizabeth House, University of Oxford.
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