Robert E. Baldwin
- Published in print:
- 2008
- Published Online:
- August 2013
- ISBN:
- 9780262026567
- eISBN:
- 9780262267656
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262026567.003.0056
- Subject:
- Economics and Finance, Econometrics
This chapter reviews selected empirical investigations of the other basic propositions of the Heckscher–Ohlin (HO) model. These are the relationship between relative changes in product prices and ...
More
This chapter reviews selected empirical investigations of the other basic propositions of the Heckscher–Ohlin (HO) model. These are the relationship between relative changes in product prices and relative changes in factor prices (Stolper–Samuelson effects); the relationship between changes in relative factor supplies and changes in the composition of output (Rybczynski effects), and the relationship between trade and the equalization of factor prices (factor price equalization effects).Less
This chapter reviews selected empirical investigations of the other basic propositions of the Heckscher–Ohlin (HO) model. These are the relationship between relative changes in product prices and relative changes in factor prices (Stolper–Samuelson effects); the relationship between changes in relative factor supplies and changes in the composition of output (Rybczynski effects), and the relationship between trade and the equalization of factor prices (factor price equalization effects).
Donald R. Davis and Prachi Mishra
- Published in print:
- 2007
- Published Online:
- February 2013
- ISBN:
- 9780226317946
- eISBN:
- 9780226318004
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226318004.003.0003
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter explores theoretical linkages between trade and poverty. It is argued that applying trade theory to suggest that liberalization will raise the wages of the unskilled in unskilled ...
More
This chapter explores theoretical linkages between trade and poverty. It is argued that applying trade theory to suggest that liberalization will raise the wages of the unskilled in unskilled abundant countries is “worse than wrong—it is dangerous.” Trade liberalization with respect to competing goods produces quasi-Stolper-Samuelson effects. Trade liberalization against a good that is a poor substitute for a local variety will affect local factor prices only weakly. Economic geography is one of the most important analytic developments in the study of trade of the 1990s. It is shown that there are dynamic gains even for the country that in the long run will have a lower per capita income as a result of trade. With markets imperfect, both the level and the location of innovation can be nonoptimal. Labor market rigidities may explain why declining industries find it hard to fire workers.Less
This chapter explores theoretical linkages between trade and poverty. It is argued that applying trade theory to suggest that liberalization will raise the wages of the unskilled in unskilled abundant countries is “worse than wrong—it is dangerous.” Trade liberalization with respect to competing goods produces quasi-Stolper-Samuelson effects. Trade liberalization against a good that is a poor substitute for a local variety will affect local factor prices only weakly. Economic geography is one of the most important analytic developments in the study of trade of the 1990s. It is shown that there are dynamic gains even for the country that in the long run will have a lower per capita income as a result of trade. With markets imperfect, both the level and the location of innovation can be nonoptimal. Labor market rigidities may explain why declining industries find it hard to fire workers.
