chap05 - Introduction Factor price equalization The Lerner...

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Unformatted text preview: Introduction Factor price equalization The Lerner diagram From factor prices to final goods prices From final goods prices to factor prices Stolper - Samuelson Graphical analysis The magnification effect Application: globalization, low wages, and unemployment Conclusions CHAPTER 5; FACTOR PRICES International Trade & the World Economy; Charles van Marrewijk Explanations for trade Classical 2. Opportunity costs 3. Comparative advantage Neo-classical 4. Production structure 5. Factor prices 6. Production volume 7. Factor abundance 1. The world economy New trade 9. Imperfect competition 10. Intra-industry trade Policy 8. Trade policy 11. Strategic trade policy 12. Int. trade organizations 13. Economic integration 17. Applied trade policy modeling Economic geography New interactions 14. Geographical economics 15. Multinationals 16. New goods, growth, and development Industrial organization International business Growth theory Part I Part II Part III Part IV 18. Concluding remarks Introduction Factor price equalization The Lerner diagram From factor prices to final goods prices From final goods prices to factor prices Stolper - Samuelson Graphical analysis The magnification effect Application: globalization, low wages, and unemployment Conclusions CHAPTER 5; FACTOR PRICES International Trade & the World Economy; Charles van Marrewijk Introduction International Trade & the World Economy; Charles van Marrewijk Objectives / key terms Factor price equalization Stolper-Samuelson Unit value isoquant / iso-cost line Lerner diagram Magnification effect Globalization debate Harry Johnson (1923-1977) Introduction Factor price equalization The Lerner diagram From factor prices to final goods prices From final goods prices to factor prices Stolper - Samuelson Graphical analysis The magnification effect Application: globalization, low wages, and unemployment Conclusions CHAPTER 5; FACTOR PRICES International Trade & the World Economy; Charles van Marrewijk Factor price equalization (FPE) International Trade & the World Economy; Charles van Marrewijk In a neo-classical framework with 2 final goods and 2 factors of production, there is a one-to-one correspondence between the prices of the final goods and the prices of the factors of production, provided both goods are produced. This implies: factor rewards known derive prices of final goods prices of final goods known derive factor rewards Corollary In a neo-classical framework with 2 countries, 2 final goods, and 2...
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This note was uploaded on 12/02/2011 for the course ECONOMIC 110 taught by Professor Kearl during the Fall '11 term at BYU.

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chap05 - Introduction Factor price equalization The Lerner...

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