Is Stolper-Samuelson dangerous and FPE a failure?
The Heckscher-Ohlin model has spawned the twin theorems of Stolper-Samuelson and factor-price equalization (FPE), both of which concern the effects of international trade on wages and income distribution. A recent literature, critical of both theorems, claims that they no longer serve as a useful guide for understanding the complex web of trade and wages. This literature also claims that the twin theorems are empirically misleading and irrelevant. The present essay argues that the critics have exaggerated the empirical failure of the twin theorems and, more importantly, they have missed the central message of the theorems; especially, that of Stolper-Samuelson on the optimality of free trade.
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.:
- David Dollar, 2005.
"Globalization, Poverty, and Inequality since 1980,"
World Bank Research Observer,
World Bank Group, vol. 20(2), pages 145-175.
- O'Rourke, Kevin Hjortshøj & Williamson, Jeffrey G, 2000.
"The Heckscher-Ohlin Model Between 1400 and 2000: When It Explained Factor Price Convergence, When It Did Not, and Why,"
CEPR Discussion Papers
2372, C.E.P.R. Discussion Papers.
- Kevin H. O'Rourke & Jeffrey G. Williamson, 1999. "The Heckscher-Ohlin Model Between 1400 and 2000: When It Explained Factor Price Convergence, When It Did Not, and Why," NBER Working Papers 7411, National Bureau of Economic Research, Inc.
- O'Rourke, K.H. & Williamson, J.G., 1999. "The Heckscher-Ohlin Model Between 1400 and 2000: When it Explained Factor Price Convergence, Ehen it Did not, and Why," Papers 99/25, College Dublin, Department of Political Economy-.
- Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007.
"Distributional Effects of Globalization in Developing Countries,"
Journal of Economic Literature,
American Economic Association, vol. 45(1), pages 39-82, March.
- Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," NBER Working Papers 12885, National Bureau of Economic Research, Inc.
- Edward E. Leamer & James Levinsohn, 1994.
"International Trade Theory: The Evidence,"
NBER Working Papers
4940, National Bureau of Economic Research, Inc.
- L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
- Sachs, Jeffrey D & Shatz, Howard J, 1996. "U.S. Trade with Developing Countries and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 234-39, May.
- Paul R. Krugman, 2008. "Trade and Wages, Reconsidered," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 103-154.
- Peter H. Lindert & Jeffrey G. Williamson, 2001.
"Does Globalization Make the World More Unequal?,"
NBER Working Papers
8228, National Bureau of Economic Research, Inc.
- O'Rourke, Kevin & Williamson, Jeffrey G., 1994. "Late Nineteenth-Century Anglo-American Factor-Price Convergence: Were Heckscher and Ohlin Right?," The Journal of Economic History, Cambridge University Press, vol. 54(04), pages 892-916, December.
- Dollar, David & Wolff, Edward N., 1988.
"Convergence Of Industry Labor Productivity Among Advanced Economies: 1963-1982,"
88-19, C.V. Starr Center for Applied Economics, New York University.
- Dollar, David & Wolff, Edward N, 1988. "Convergence of Industry Labor Productivity among Advanced Economies, 1963-1982," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 549-58, November.
- Mokhtari, Manouchehr & Rassekh, Farhad, 1989. "The Tendency towards Factor Price Equalization among OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 636-42, November.
- Leamer, Edward E, 1996. "Wage Inequality from International Competition and Technological Change: Theory and Country Experience," American Economic Review, American Economic Association, vol. 86(2), pages 309-14, May.
When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:19:y:2010:i:4:p:555-561. 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: (Zhang, Lei)
If references are entirely missing, you can add them using this form.