Notes on Factor Price Equality and Biased Technical Change in a Two-Cone Trade Model

Daniel Becker () and Erich Gundlach ()

Kiel Working Papers from Kiel Institute for the World Economy

Abstract: 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.

Keywords: factor price equality; economic growth; two cone trade model (search for similar items in EconPapers)
JEL-codes: F11 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2006-09
View list of references

Downloads: (external link)
http://www.ifw-members.ifw-kiel.de/publications/no ... de-model/kap1300.pdf
http://www.ifw-members.ifw-kiel.de/publications/no ... 201300%20revised.pdf (application/pdf)

Related works:
Working Paper: Notes on Factor Price Equality and Biased Technical Change in a Two-Cone Trade Model (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:kie:kieliw:1300

Access Statistics for this paper

More papers in Kiel Working Papers from Kiel Institute for the World Economy
Series data maintained by Dieter Stribny ().