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Factor price equalization: revisited

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  • K. Doroodian
  • Chulho Jung

Abstract

Although theoretical discussion of Factor Price Equalization (FPE) theorem has been quite prolific in the international economics literature, empirical tests of the FPE theorem have been very limited and inadequately performed. In this paper, we use Johansen's multivariate cointegration testing procedure to test statistically the FPE theorem among seven EC countries for 1960-91. The results show that the FPE theorem is strongly supported for the period considered.

Suggested Citation

  • K. Doroodian & Chulho Jung, 1995. "Factor price equalization: revisited," Applied Economics Letters, Taylor & Francis Journals, vol. 2(7), pages 223-226.
  • Handle: RePEc:taf:apeclt:v:2:y:1995:i:7:p:223-226
    DOI: 10.1080/135048595357311
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    References listed on IDEAS

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    1. Laurence J. Kotlikoff & Edward E. Leamer & Jeffrey Sachs, 1981. "The International Economics of Transitional Growth: The Case of the United States," NBER Working Papers 0773, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Elisa Alvarez Lopez & Rafael Myro Sanchez, 2005. "Specialization and openness to foreign trade in the European Union," Applied Economics Letters, Taylor & Francis Journals, vol. 12(13), pages 805-810.
    2. Adolfo Figueroa, 2017. "International Trade and Real Wages," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 40(80), pages 9-28.

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