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- Title
Necessary and Sufficient Conditions for Factor Price Equalization.
- Authors
Blackorby, Charles; Schworm, William; Venables, Anthony
- Abstract
Although models with factor price equalization are used frequently in both theoretical and applied research in international economics, only sufficient conditions for factor price equalization have been presented in the literature. In this paper, we present necessary and sufficient conditions for FPE under quite general assumptions about the technologies of different countries. The necessary and sufficient conditions we derive are consistent with joint production, decreasing returns to scale, and substantive differences in the technologies and endowments of different countries. Our results enable us to reconcile the classical approach and the integrated equilibrium approach to factor price equalization.
- Subjects
PRICING; INTERNATIONAL economic relations; FACTOR proportions
- Publication
Review of Economic Studies, 1993, Vol 60, Issue 2, p413
- ISSN
0034-6527
- Publication type
Article
- DOI
10.2307/2298065