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Factor Trade and Goods Trade

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  • Lars E.O. Svensson

Abstract

Previous work by Dixit and Woodland on the effect of inter-country factor endowment differences on goods trade is extended to include simultaneous factor trade and goods trade. The goods trade pattern with factor trade is compared to that without factor trade. It is for instance shown that goods trade and factor trade may be substitutes or complements, depending upon whether traded and nontraded factors are "cooperative" or "non-cooperative." The asymmetry between the effects of differences in endowments of traded and differences in endowments of nontraded factors is emphasized.

Suggested Citation

  • Lars E.O. Svensson, 1982. "Factor Trade and Goods Trade," NBER Working Papers 0999, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0999
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    References listed on IDEAS

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