TradeLecture17

TradeLecture17 - Chapter 7 International Factor Movements...

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Chapter 7 t t i l F t M t International Factor Movements Slides based on Krugman and Obstfeld (2003) 6 th ed, and slides prepared for Pearson Education by Iordanis Petsas and li Di l Elias Dinopoulos.
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Introduction In this chapter we look at international factor movements . Factor movements include : Labor migration ransfer of capital via international borrowing and lending Transfer of capital via international borrowing and lending International linkages involved in the formation of multinational corporations International factor movements are in many cases motivated by the same forces as movements in goods and rvices So we can use some of the models of chapters 2 services. So we can use some of the models of chapters 2- 6 to understand factor movements too. © Ben Zissimos, Vanderbilt University
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International Labor Mobility A One-Good Model Without Factor Mobility Assumptions of the model: • There are two countries (Home and Foreign). • There are two factors of production: Land ( T ) and Labor ( L ). •Both countries produce only one good (refer to it as o cou es p oduce o y o e good ( e e o s “output”). • Both countries have the same technology but different
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TradeLecture17 - Chapter 7 International Factor Movements...

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