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The changing relative price of skill-intensive goods

Author

Listed:
  • Gäckle, Christian
  • Schustereder, Ingmar
  • Waeger, Patricia

Abstract

Based on the conceptual results of Findlay, Grubert (1959) and Krugman (2000) we analyze the movement of the relative price of skill-intensive goods under skill-biased technological change and the countervailing effect of increasing world-wide supply of low-skilled-labor. While the labor supply effect has become more important in the last two decades, we show that the distinction between large and small technological progress is crucially important for analyzing the changing pattern of relative price developments.

Suggested Citation

  • Gäckle, Christian & Schustereder, Ingmar & Waeger, Patricia, 2006. "The changing relative price of skill-intensive goods," Kiel Advanced Studies Working Papers 433, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwasw:433
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    References listed on IDEAS

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    1. Nunnenkamp, Peter & Gundlach, Erich & Agarwal, Jamuna Prasad, 1994. "Globalisation of production and markets," Open Access Publications from Kiel Institute for the World Economy 807, Kiel Institute for the World Economy (IfW Kiel).
    2. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
    3. Jagdish Bhagwati & Arvind Panagariya, 2004. "The Muddles over Outsourcing," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 93-114, Fall.
    4. Daniel Becker & Erich Gundlach, 2005. "Notes on Factor Price Equality and Biased Technological Change in a Two-Cone Trade Model," DEGIT Conference Papers c010_006, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Xu, Bin, 2001. "Factor bias, sector bias, and the effects of technical progress on relative factor prices," Journal of International Economics, Elsevier, vol. 54(1), pages 5-25, June.
    6. Krugman, Paul R., 2000. "Technology, trade and factor prices," Journal of International Economics, Elsevier, vol. 50(1), pages 51-71, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    skill-biased technological change; unskilled-labor supply; relative goods prices;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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