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The Lens Condition with Two Factors

  • Kwan Koo Yun
  • Siu-kee Wong
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    We give a simple, constructive proof that the lens condition implies the factor-price equalization condition, when there are only two factors. Taking stock of the sufficient conditions under which the lens condition implies the FPE condition, we have the conditions of two factors or two goods or two countries or the condition that the rank of the factor-use matrix is equal to the number of goods. We show that in an essential sense, there are no other such conditions.

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    File URL: http://www.albany.edu/economics/research/workingp/2001/KYun.pdf
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    Paper provided by University at Albany, SUNY, Department of Economics in its series Discussion Papers with number 01-08.

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    Date of creation: 2001
    Date of revision:
    Handle: RePEc:nya:albaec:01-08
    Contact details of provider: Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.
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    Order Information: Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.
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    1. Xiang, Chong, 2001. "The sufficiency of the 'lens condition' for factor price equalization in the case of two factors," Journal of International Economics, Elsevier, vol. 53(2), pages 463-474, April.
    2. Demiroglu, U. & Yun, K.K., 1997. "The Lens Conditions for factor Price Equalization," Working Papers 404, Research Seminar in International Economics, University of Michigan.
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