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- Title
On Factor Price Equalization when Commodities Outnumber Factors: A Comment.
- Authors
Johnson, Harry G.
- Abstract
This article offers a commentary on the analysis of the factor price equalization problem conducted in terms of differences in factor endowments. The author points out the effects of introducing more goods on the probability of factor price equalization. This paper argues on the occurrence of factor price equalization. Issues between two quite different propositions are discussed. First, the introduction of an additional good makes it possible for factor prices under trade to diverge from their pre-trade relationship rather than convergence. Second, demand conditions may make factor prices under trade converge less in the three good than in the two-good case.
- Subjects
FACTOR proportions; COMPARATIVE advantage (International trade); FREE trade; TERMS of trade; INTERNATIONAL trade; TRADE regulation
- Publication
Economica, 1970, Vol 37, Issue 145, p89
- ISSN
0013-0427
- Publication type
Article
- DOI
10.2307/2552007