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Factor Price Equalization in a World of Many Trading Countries

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  • Murray C. Kemp

Abstract

Conditions sufficient for factor price equalization within any non‐trivial subset of trading countries are provided. The conditions are that (a) the factor endowment ratios of countries in the subset are all bounded by the factors‐in‐use ratios in an equilibrium of the hypothetical world economy in which factors are perfectly mobile within the subset, and that (b) in dimensions higher than two, either the rank of the factors‐in‐use matrix is 2 or products do not outnumber factors and the factors‐in‐use matrix is of full rank.

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  • Murray C. Kemp, 2006. "Factor Price Equalization in a World of Many Trading Countries," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 675-677, September.
    • Handle: RePEc:bla:reviec:v:14:y:2006:i:4:p:675-677
    DOI: 10.1111/j.1467-9396.2006.00591.x
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