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Why the Lens Condition Cannot Imply Factor Price Equalization

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  • Ling Qi

Abstract

This paper explains why the lens condition cannot imply the factor price equalization condition when the rank of the factor use matrix is larger than two, but smaller than the number of goods. This arises from production substitution and the degeneration of the convex polyhedrons consisting of the possible output vectors of a country where the factor market is cleared. Two kinds of necessary and sufficient conditions for the factor price equalization condition are given. As a byproduct, a simple proof is given on equivalence between the lens condition and the factor price equalization condition in the case where the rank of the factor use matrix is two. Copyright © 2010 Blackwell Publishing Ltd.

Suggested Citation

  • Ling Qi, 2010. "Why the Lens Condition Cannot Imply Factor Price Equalization," Review of International Economics, Wiley Blackwell, vol. 18(4), pages 772-779, September.
  • Handle: RePEc:bla:reviec:v:18:y:2010:i:4:p:772-779
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    References listed on IDEAS

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    1. Ling Qi, 2007. "Sufficiency Of The Lens Condition For Factor Price Equalization," Pacific Economic Review, Wiley Blackwell, vol. 12(2), pages 237-243, May.
    2. Deardorff, Alan V., 1994. "The possibility of factor price equalization, revisited," Journal of International Economics, Elsevier, vol. 36(1-2), pages 167-175, February.
    3. Demiroglu, Ufuk & Koo Yun, Kwan, 1999. "The lens condition for factor price equalization," Journal of International Economics, Elsevier, vol. 47(2), pages 449-456, April.
    4. Siu-kee Wong & Kwan Koo Yun, 2003. "The Lens Condition with Two Factors," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 692-696, September.
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    Cited by:

    1. Brakman, Steven & van Marrewijk, Charles, 2013. "Lumpy countries, urbanization, and trade," Journal of International Economics, Elsevier, vol. 89(1), pages 252-261.

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