Standard trade theory views the capital stock as an endowment. However, trade policy can affect a country's steady-state capital stock. By ignoring the endogeneity of capital, standard analysis is incomplete and can be misleading. For instance, when capital in endogenous, the Stolper-Samuelson...

Do New York and Nashville face the same pressures from increased trade? This paper considers the role of international trade in shaping the product mix and relative wages for regions within the US. Using the predictions from a Heckscher-Ohlin trade model, we ask whether all the regions in the US...

This paper uses history to explore the empirical content of two determinants of tariff policy that have a long pedigree: the Stolper-Samuelson corollary to the Heckscher-Ohlin theorem, and the infant-industry argument for protection. It reports a set of world tariff facts for the 150 years...

There are two contrasting views of pre-19th century trade and globalization. First, there are the world history scholars like Andre Gunder Frank who attach globalization 'big bang' significance to the dates 1492 (Christopher Colombus stumbles on the Americas in search of spices) and 1498 (Vasco...

This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across...

A number of studies have tried to gauge the effect of international trade on the rising U.S. skill premium by examining whether product prices in unskill-intensive sectors have fallen relative to prices in skill-intensive sectors. However, these studies do not estimate what share of domestic...

Study of the factor content of trade has become a laboratory to test our ideas about how the key elements of endowments, production, absorption and trade fit together within a general equilibrium framework. Already a great deal of progress has been made in fitting these pieces together....

We estimate how trade openness affects the relationship between wages, labour productivity and foreign wages using sector-level time series for several EU member states. In some countries wages became less responsive to foreign wages as trade costs declined. We show this counter-intuitive result...

Recent literature on the labor-market effects of U.S. immigration tends to find little correlation between regional immigrant inflows and changes in relative regional wages. In this paper we examine whether immigration, or endowment shocks more generally, altered U.S. regional output mixes as...

Deardorff [Journal of International Economics 36 (1994) 167-175] offers an intuitively appealing test for factor price equality (FPE). He demonstrates that FPE is impossible if the set (i.e., lens) of points defined by regional factor abundance vectors does not lie within the set of points...

A Third World data base documenting commodity and factor prices 1870-1940 has been collected, yielding annual time series on wage/rental ratios, land/labor ratios, the terms of trade, and other explanatory variables for: Argentina, Burma, Egypt, Japan, Korea, the Punjab, Taiwan, Thailand and...

The pattern of U.S. imports has changed dramatically in recent decades, mainly because of an unprecedented rise in imports from China. This new pattern has coincided with a resurgence of increasing wage inequality between high-skill and low-skill labor which has reignited a long-standing...

This paper considers the appropriateness of using such quantitative measures as changes in the factor content of trade and the behavior of factor proportions within versus among industries to draw inferences about changes in relative factor prices. The conclusion reached is that only under...

The classical Heckscher-Ohlin-Mundell paradigm states that trade and capital mobility are substitutes, in the sense that trade integration reduces the incentives for capital to flow to capital-scarce countries. In this paper we show that in a world with heterogeneous financial development, the...

This paper develops and implements a novel test of the Stolper-Samuelson theorem. We use nationally-representative matched employer-employee panel data from 1997 through 2015 to study the effect of the rise in China’s exports on French worker earnings. Our version of the Stolper-Samuelson...

At the turn of the millennium three frequently cited potential causes of new challenges for wage policy in Germany are revisited in this study: skilled-biased technological progress, the increasing international integration of labor and product markets, and the monetary integration of the EMU....

Factor price equality across countries is an important implication of the Heckscher-Ohlin-Samuelson model of international trade. Although an influential theoretical result, the model has received surprisingly little empirical support. Burgman and Geppert (1993) argue that this might be due to...

In recent years many economists have analyzed whether international trade has contributed to rising U.S. wage inequality by changing relative product prices. In this paper I survey the findings of nine product-price' studies which together demonstrate how the methodology of product-price studies...

This paper develops and implements a novel test of the Stolper-Samuelson theorem. We use nationally-representative matched employer-employee panel data from 1997 through 2015 to study the effect of the rise in China's exports on French worker earnings. Our version of the Stolper-Samuelson...

In this paper we derive a new model on exchange rate response to a lasting higher interest rate level. Contemporary models do not provide a convincing explanation for this relationship, but recent research suggests that models based on demand-pull effects to be somewhat confined to small funding...

In this paper we derive a new model on exchange rate response to a lasting higher interest rate level. Contemporary models do not provide a convincing explanation for this relationship, but recent research suggests that models based on demand-pull effects to be somewhat confined to small funding...

Large wage differences between countries ("place premiums") are well documented. Theory suggests that factor price convergence should follow increased migration, capital flows, and commercial integration. All three have increased between the United States and Mexico over the last 25 years. This...

Paul Samuelson's famous 1948 "factor price equalization theorem" was his main contribution to international trade theory. He demonstrated conditions under which trade in goods only would lead to full equalization of the remuneration of productive factors across countries. In practice, general...

Paul Samuelson's famous 1948 "factor price equalization theorem" was his main contribution to international trade theory. He demonstrated conditions under which trade in goods only would lead to full equalization of the remuneration of productive factors across countries. In practice, general...

Neoclassical trade theory suggests that factor price convergence should follow increased commercial integration. Rising commercial integration and foreign direct investment followed the 1994 North American Free Trade Agreement between the United States and Mexico. This paper evaluates the degree...

We demonstrate that agent-based simulations can exhibit results in line with classic macroeconomic theory. In particular, we present an agent-based simulation of an Arrow-Debreu economy that accurately exhibits the Stolper-Samuelson effect as an emergent property. Absent of a Walrasian...

European economic integration is commonly believed to be incomplete, and that further reforms are needed. In this context, the union of U.S. states is considered the benchmark of complete economic integration and is often the basis for comparison regarding the extent of E.U economic integration....

Large wage differences between countries ("place premiums") are well documented. Theory suggests that factor price convergence should follow increased migration, capital flows, and commercial integration. All three have increased between the United States and Mexico over the last 25 years. This...

Both the Heckscher-Ohlin theorem and the factor price equalization theorem depend on or related to trade equilibriums. The trade equilibrium is the price equilibrium of production, consumption and trade. This study provides a price solution for the Heckscher-Ohlin model by using HOV assumption...

This paper conducts revealed preference tests of the Stolper-Samuelson theorem. If the Stolper-Samuelson theorem holds, one would expect to find a country's relatively scarce factor of production (in this case labor) harmed from trade liberalization and thus opposing trade liberalization. The...

Neoclassical trade theory suggests that factor price convergence should follow increased commercial integration. Rising commercial integration and foreign direct investment followed the 1994 North American Free Trade Agreement between the United States and Mexico. This paper evaluates the degree...

Neoclassical trade theory suggests that factor price convergence should follow increased commercial integration. Rising commercial integration and foreign direct investment followed the 1994 North American Free Trade Agreement between the United States and Mexico. This paper evaluates the degree...

Large wage differences between countries ("place premiums") are well documented. Neoclassical trade theory suggests that factor price convergence should follow increased commercial integration. Rising commercial integration, foreign direct investment, and migration followed the 1994 North...

Neoclassical trade theory suggests that factor price convergence should follow increased commercial integration. Rising commercial integration and foreign direct investment followed the 1994 North American Free Trade Agreement between the United States and Mexico. This paper evaluates the degree...