Factor Price Equalization in a World of Many Trading Countries

Conditions sufficient for factor price equalization within any non-trivial subset of trading countries are provided. The conditions are that (a) the factor endowment ratios of countries in the subset are all bounded by the factors-in-use ratios in an equilibrium of the hypothetical world economy in which factors are perfectly mobile within the subset, and that (b) in dimensions higher than two, <i>either</i> the rank of the factors-in-use matrix is 2 <i>or</i> products do not outnumber factors and the factors-in-use matrix is of full rank. Copyright © 2006 The Author; Journal compilation © 2006 Blackwell Publishing Ltd.