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Paths of Development and Wage VariationsPaths of Development and Wage Variations

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Author Info
Kozo Kiyota (Yokohama National University and University of Michigan)

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Abstract

In analyzing the relationship between factor endowments and sectoral percapita output (the path of development), Schott (2003) showed empirically that the number of cones was neither one nor three but two, and that all countries fall into one of these two cones. This is a puzzle because it is inconsistent with large wage variations across economies. This paper attempts to solve this puzzle, introducing complete and incomplete specialization into a multiplecone model. Empirical results reveal that factor endowments can explain Heckscher-Ohlin specialization and the wage variations across economies at the same time once the multiple-cone model allows the complete specialization.

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File URL: http://www.fordschool.umich.edu/rsie/workingpapers/Papers551-575/r572.pdf
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Publisher Info
Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 572.

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Length: 32 pages
Date of creation: Nov 2007
Date of revision: Nov 2008
Handle: RePEc:mie:wpaper:572

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Web page: http://www.fordschool.umich.edu/rsie/
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Related research
Keywords: Paths of Development; Complete Specialization; Multiple Cones; Factor Price Equalization; Intra-industry Heterogeneity; Wage Variations; Japan;

Find related papers by JEL classification:
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F2 - International Economics - - International Factor Movements and International Business
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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This page was last updated on 2009-12-21.

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