Disparity in wages but not in returns to capital between rich and poor countries
One of the striking features of the international economy is that while the level of average wage rates in rich countries is many times that in poor countries, their average rates of return to capital seem to be roughly similar or the differences in them relatively very small. This cannot be fully explained away by the fact that capital is internationally much more mobile than labor. There is remarkably little movement of return-sensitive private capital between the richest and the poorest countries. In this paper we assume instead that factors of production are internationally immobile, and try to explain the observed asymmetry in the pattern of factor prices in terms of particular types of differences in production functions between rich and poor countries, in terms of differential learning effects and differential degrees of specialization in the sector producing intermediate inputs and services.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rodriguez-Clare, Andres, 1996. "The division of labor and economic development," Journal of Development Economics, Elsevier, vol. 49(1), pages 3-32, April.
- Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
- M. A. M. Smith, 1976. "International Trade Theory in Vintage Models," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 99-113.
- Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:49:y:1996:i:1:p:257-270. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.