Stubbornly Persistent Factor Migrations with Rapid International Economic Convergence

Harry Clarke

Australian Economic Papers, 1996, vol. 35, issue 67, 236-49

Abstract: A model of persisting labor and capital migrations is proposed which relies on capital installation adjustment costs. Labor and capital markets are supposed internationally integrated with free factor movements imposing a 'law of one price' on the gross return to each factor. The development of infrastructure and other capital projects however is accompanied by adjustment costs that create a divergence between the gross and net returns to capital. This makes it optimal to accumulate capital only gradually. Thus, although there is rapid international economic convergence because returns on traded assets and labor are internationally determined, labor and capital immigrations persist. The consistency of this model with some stylized facts of experience is examined using data for four high factor immigration economies from 1870-1991. Copyright 1996 by Blackwell Publishers Ltd/University of Adelaide and Flinders University of South Australia

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Stubbornly Persistent Factor Migrations with Rapid International Economic Convergence (1995)
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: https://EconPapers.repec.org/RePEc:bla:ausecp:v:35:y:1996:i:67:p:236-49

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0004-900X

Access Statistics for this article

Australian Economic Papers is currently edited by Daniel Leonard

More articles in Australian Economic Papers from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().