Journal Article
Factor Price Equality and Biased Technical Change in a Two-Cone Trade Model
Autoren
Erscheinungsdatum
DOI
10.1111/j.1467-9361.2007.00421.x
We reconsider the effects of long-run economic growth on relative factor prices across cones of specialization. We model economic growth as exogenous technical change. Allowing for capital biased technical change with a sector bias and for endogenous commodity prices, we find that economic growth may increase or decrease factor price differences across cones. For a neutral demand side and capital biased growth in the most capital intensive sector, we find that economic growth encourages less factor price diversity across cones.
