Notes on factor price equality and biased technical change in a two-cone trade model

We reconsider the effects of long-run economic growth on relative factor prices across cones of specialization. We model economic growth as exogenous technical change. Allowing for capital biased technical change with a sector bias and for endogenous commodity prices, we find that economic growth may increase or decrease factor price differences across cones. For a neutral demand side and capital biased growth in the most capital intensive sector, we find that economic growth encourages less factor price diversity across cones.

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Year of publication:	2006
Authors:	Becker, Daniel Thomas ; Gundlach, Erich
Publisher:	Kiel : Kiel Institute for the World Economy (IfW)
Subject:	Faktorpreisausgleich \| Wirtschaftswachstum \| Technischer Fortschritt \| Bias \| Außenwirtschaftstheorie \| Theorie \| Economic growth \| Two cone trade model \| Factor price equality

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Series:	Kiel Working Paper ; 1300
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	518929779 [GVK] hdl:10419/3902 [Handle] RePEc:zbw:ifwkwp:1300 [RePEc]
Classification:	F11 - Neoclassical Models of Trade ; O40 - Economic Growth and Aggregate Productivity. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10010272961