The Lens Conditions for factor Price Equalization
AbstractDeardorff (1994) provides a condition that is necessary for factor price equalization across countries. That condition is a generalization of "country endowments contained in the diversification cone" from the standard 2x2x2 Hecksher-Ohlin model to the case of many goods, countries and factors. He also shows that this condition is sufficient in the case of two countries, and conjectures that sufficiency might hold in general. In this paper we establish sufficiency in some further cases. However, we show by a counterexample that the sufficiency does not hold in general.
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Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 404.
Length: 10 pages
Date of creation: 1997
Date of revision:
ECONOMIC INTEGRATION ; PRICES;
Other versions of this item:
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F10 - International Economics - - Trade - - - General
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- Deardorff, A.V., 1991.
"The Possibility of Factor Price Equalization, Revisited,"
277, Research Seminar in International Economics, University of Michigan.
- Deardorff, Alan V., 1994. "The possibility of factor price equalization, revisited," Journal of International Economics, Elsevier, vol. 36(1-2), pages 167-175, February.
- 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.
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- Harald Fadinger, 2006. "Development Accounting in a Heckscher-Ohlin World," DEGIT Conference Papers c011_017, DEGIT, Dynamics, Economic Growth, and International Trade.
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- Steven Brakman & Charles van Marrewijk, 2011.
"Lumpy Countries, Urbanization, and Trade,"
CESifo Working Paper Series
3669, CESifo Group Munich.
- Debaere, Peter & Demiroglu, Ufuk, 2003. "On the similarity of country endowments," Journal of International Economics, Elsevier, vol. 59(1), pages 101-136, January.
- Debaere, Peter, 2004. "Does lumpiness matter in an open economy?: Studying international economics with regional data," Journal of International Economics, Elsevier, vol. 64(2), pages 485-501, December.
- Andrew B. Bernard & Raymond Robertson & Peter K. Schott, 2005. "A Note on the Empirical Implementation of the Lens Condition," NBER Working Papers 11448, National Bureau of Economic Research, Inc.
- Kwan Koo Yun & Siu-kee Wong, 2001. "The Lens Condition with Two Factors," Discussion Papers 01-08, University at Albany, SUNY, Department of Economics.
- 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.
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