WK5_13Sept_Ch_5

WK5_13Sept_Ch_5 - Week 4 (Thursday, Sept. 8, 2011) Finish...

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Finish Chapter 4 and 5 Week 4 (Thursday, Sept. 8, 2011)
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Today 1. Quick Review of Short Run, Medium- Run, Long Run Income Distribution Effects 2. Stolper-Samuelson Theory 3. New Graph of Heckscher-Ohlin Model 4. Test of Heckscher-Ohlin or Factor Abundance Model 5. Data on Stolper-Samuelson
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Begin With Following Assumptions If Tw/Lw > Tc/Lc If Tus/Lus > T*/L* then PC/PW > PC*/PW* U.S. imports cloth & exports wheat
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Impact on Prices in U.S. Price of wheat P W /P C Export Price of cloth P C /P W Import
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Summary of the Effect of Trade on the Distribution of Income: The Short Run Wheat Cloth The Export Industry The Import-Competing Industry Tw r w r c Tc Lw ϖ w ϖ c Lc The Medium Run The Export Industry The Import-Competing Industry Tw r w = r = r c Tc Lw ϖ w ϖ c Lc The Long Run The Export Industry The Import-Competing Industry Tw r w = r = r c Tc Lw ϖ w = ϖ = ϖ c Lc > > >
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SCARCE FACTOR U.S. Opens to Trade ωw ωw = ωc --------- ------------------ time ωw=ωc ωc Time Path of the Wage Rate
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This note was uploaded on 01/28/2012 for the course ECN 306 taught by Professor Croucher during the Fall '08 term at ASU.

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WK5_13Sept_Ch_5 - Week 4 (Thursday, Sept. 8, 2011) Finish...

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