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The Lens Conditions for factor Price Equalization

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  • Demiroglu, U.
  • Yun, K.K.

Abstract

Deardorff (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 Info

Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 404.

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Length: 10 pages
Date of creation: 1997
Date of revision:
Handle: RePEc:mie:wpaper:404

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Postal: ANN ARBOR MICHIGAN 48109
Web page: http://www.fordschool.umich.edu/rsie/
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Keywords: ECONOMIC INTEGRATION ; PRICES;

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References

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  1. Deardorff, Alan V., 1994. "The possibility of factor price equalization, revisited," Journal of International Economics, Elsevier, vol. 36(1-2), pages 167-175, February.
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Citations

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Cited by:
  1. Harald Fadinger, 2006. "Development Accounting in a Heckscher-Ohlin World," DEGIT Conference Papers c011_017, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. Xiang, C., 1999. "The Sufficiency of the "Lens Conditions" for Factor Price Equalization in the Case of Two Factors," Working Papers 434, Research Seminar in International Economics, University of Michigan.
  3. Debaere, Peter & Demiroglu, Ufuk, 2003. "On the similarity of country endowments," Journal of International Economics, Elsevier, vol. 59(1), pages 101-136, January.
  4. Kwan Koo Yun & Siu-kee Wong, 2001. "The Lens Condition with Two Factors," Discussion Papers 01-08, University at Albany, SUNY, Department of Economics.
  5. Brakman, Steven & van Marrewijk, Charles, 2013. "Lumpy countries, urbanization, and trade," Journal of International Economics, Elsevier, vol. 89(1), pages 252-261.
  6. 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.
  7. Harald Fadinger, 2007. "Development Accounting in a Heckscher-Ohlin World," 2007 Meeting Papers 600, Society for Economic Dynamics.
  8. Eleydiane Maria Gomes Vale & João Mário De Franç, 2014. "Cones De Diversificação E Comércio Exterior: Uma Análise Sobre Diferenças Salariais E Competitividade Industrial No Nordeste E Sudeste Do Brasil," Anais do XLI Encontro Nacional de Economia [Proceedings of the 41th Brazilian Economics Meeting] 109, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  9. 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.
  10. 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.

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