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Factor Prices and the Factor Content of Trade Revisited: What's the Use?


  • Deardorff, A.V.


This paper examines the usefulness of a result of Deardorff and Staiger (1988), who showed that the factor content of trade can be interpreted under certain assumptions as indicating the nature of the factor price adjustments that can, in a specified sense, be attributed to that trade. This paper elaborates on the sense in which this result says anything about the factor market effects of trade. It also examines several of the assumptions that were used by Deardorff and Staiger to determine whether they can be relaxed.

Suggested Citation

  • Deardorff, A.V., 1997. "Factor Prices and the Factor Content of Trade Revisited: What's the Use?," Working Papers 409, Research Seminar in International Economics, University of Michigan.
  • Handle: RePEc:mie:wpaper:409

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    References listed on IDEAS

    1. Kotlikoff, Laurence J, 1984. "Taxation and Savings: A Neoclassical Perspective," Journal of Economic Literature, American Economic Association, vol. 22(4), pages 1576-1629, December.
    2. Debaere, Peter & Demiroglu, Ufuk, 2003. "On the similarity of country endowments," Journal of International Economics, Elsevier, vol. 59(1), pages 101-136, January.
    3. Leamer, Edward E. & Levinsohn, James, 1995. "International trade theory: The evidence," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 26, pages 1339-1394 Elsevier.
    4. J??r??me Hericourt & Mathilde Maurel, 2000. "The Feldstein-Horioka Puzzle Revisited: An ???European-Regional??? Perspective," William Davidson Institute Working Papers Series wp763, William Davidson Institute at the University of Michigan.
    5. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    6. Michael Mussa & Morris Goldstein, 1993. "The integration of world capital markets," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 245-330.
    7. Jaume Ventura, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 57-84.
    8. Ethier, Wilfred J., 1984. "Higher dimensional issues in trade theory," Handbook of International Economics,in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 3, pages 131-184 Elsevier.
    9. Michael Dooley & Jeffrey Frankel & Donald J. Mathieson, 1987. "International Capital Mobility: What Do Saving-Investment Correlations Tell Us?," IMF Staff Papers, Palgrave Macmillan, vol. 34(3), pages 503-530, September.
    10. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
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    Cited by:

    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2215-2288 is not listed on IDEAS
    2. Rodolfo Helg & Riccardo Faini & Anna M. Falzoni & Marzio Galeotti & Alessandro Turrini, 2001. "Importing Jobs And Exporting Firms? On The Wage And Employment Implications Of Italy’S Trade And Foreign Direct Investment Flows," International Trade 0103001, EconWPA.
    3. Robert E. Baldwin, 2001. "Inferring Relative Factor Price Changes from Quantitative Data," NBER Chapters,in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 47-70 National Bureau of Economic Research, Inc.
    4. Jonathan E. Haskel, 1999. "The Trade and Labour Approaches to Wage Inequality," Working Papers 405, Queen Mary University of London, School of Economics and Finance.
    5. Mark S. Leclair, 2002. "Export Composition and Manufacturing Employment in the US during the Economic Downturn of 1991-92," Economic Systems Research, Taylor & Francis Journals, vol. 14(2), pages 147-156, June.

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade


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