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Factor movements and commodity trade as complements

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  • Markusen, James R.

Abstract

Several models are presented in which factor mobility leads to an increase in the volume of world trade. The models share the common characteristic that the basis for trade is something other than differences in relative factor endowments. These alternative bases for trade include returns to scale, imperfect competition, production and factor taxes, and differences in production technology. Taken together, the models suggest a more general idea: the widely held notion that trade in goods and factors are substitutes is in fact a rather special result which is a general characteristic only of factor proportions models.
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Suggested Citation

  • Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
  • Handle: RePEc:eee:inecon:v:14:y:1983:i:3-4:p:341-356
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    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F00 - International Economics - - General - - - General
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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