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Category: FACTOR PRICE - Part 3

Implications of RFPEQ Cone Heckscher-Ohlin Equilibria FACTOR PRICE EQUALITY

FACTOR PRICE EQUALITY AND THE ECONOMIES OF THE UNITED STATES: Countries factor

The implications of multiple relative factor price regions extend into the industrial organization and productivity literatures as well. If regions in the US face substantially different factor prices, then many estimates of industry production functions that assume common factor prices are misspecified. This is likely to feed into calculations of productivity and markups at both the plant and industry levels.

FACTOR PRICE EQUALITY AND THE ECONOMIES OF THE UNITED STATES: Effectively integrates

While the concept of multiple factor price cones is usually applied across countries, it is substantially more controversial when considering regions within a relatively flexible economy such as the US. It is easy to imagine that the relative similarity of endowments, regulations and markets combined with the mobility of capital, technology, and even labor within the US would make it likely that relative price differences are at best transitory. In that scenario, the regions of…

FACTOR PRICE EQUALITY AND THE ECONOMIES OF THE UNITED STATES

ABSTRACT Do New York and Nashville face the same pressures from increased trade? This paper considers the role of international trade in shaping the product mix and relative wages for regions within the US. Using the predictions from a Heckscher-Ohlin trade model, we ask whether all the regions in the US face the same relative factor prices. Using the production side of the HO model, we derive a general test of relative factor price equality…