Notes # 10 reading

Notes # 10 reading - benefit and others that do not benefit...

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Political Cleavages and Changing Exposure to Trade Ronald Rogowski Topic: International Trade Stolper-Samuelson Theorem Stolper-Samuelson Theorem: increases or decreases in the costs and difficulty of international trade should affect domestic political cleavages Rich in Labor but poor in capital= protection harms labor, benefits capital= liberalization harms capital benefits labor Simple models of the polity and the economy 1. The winners of any exogenous change want to expand free trade 2. Losers want protection 3. Winners increase their power Three factor model: labor, alnd and factor A. Three main classes. 1. Land: Rural + Wealthy 2. Labor: Urban + Poor 3. Capital: Urban +Wealthy SHORT NOTES The article basically states and gives examples on how the Stolper-Samuelson Theorem is applied and how it is actually true. It exaplins how in a three factor model there are factors of production that
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Unformatted text preview: benefit and others that do not benefit from free trade/protectionism. Not worth it to make questions. Stolper-Samuelson, which is usually applied to endogenous changes in barriers to trade, uses comparative advantage to conclude that trade liberalization will benefit abundant factors of production and disadvantage scarce factors in the home economy. Rogowski takes this analysis one step further to argue that abundant factors of production will advocate for free trade and scarce factors for economic closure Two kinds of cleavage can result from different configurations of these two variables – “class conflict” when capital and agriculture organize against labor and “urban-rural conflict” when capital and labor join the same camp....
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