How Likely Is Factor Price Equalization?
Publikation: Working paper › Forskning
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How Likely Is Factor Price Equalization? / Hansen, Bodil O.; Keiding, Hans.
Department of Economics, University of Copenhagen, 2008.Publikation: Working paper › Forskning
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TY - UNPB
T1 - How Likely Is Factor Price Equalization?
AU - Hansen, Bodil O.
AU - Keiding, Hans
N1 - JEL classification: F11
PY - 2008
Y1 - 2008
N2 - The idea of treating factor price equalization as a situation, where the distribution of factors among countries is compatible with an equilibrium in an integrated world economy, has been refined to give the so-called lens condition for factor price equalization. In this paper, we show that the lens condition may be used to give estimates for the probability of factor price equalization when factors are distributed randomly among countries and, in addition, the techologies are sampled according to a given probability distribution. The estimates indicate that factor price equalization may occur less often than intuitively conceived
AB - The idea of treating factor price equalization as a situation, where the distribution of factors among countries is compatible with an equilibrium in an integrated world economy, has been refined to give the so-called lens condition for factor price equalization. In this paper, we show that the lens condition may be used to give estimates for the probability of factor price equalization when factors are distributed randomly among countries and, in addition, the techologies are sampled according to a given probability distribution. The estimates indicate that factor price equalization may occur less often than intuitively conceived
KW - Faculty of Social Sciences
KW - international trade
KW - lens condition
M3 - Working paper
BT - How Likely Is Factor Price Equalization?
PB - Department of Economics, University of Copenhagen
ER -
ID: 3607201