Appendix to Chapter 4

Giancarlo Gandolfo

Chapter Chapter 20 in International Trade Theory and Policy, 2014, pp 451-462 from Springer

Abstract: Abstract We have shown in the text the crucial importance of the strong factor-intensity assumption (i.e., absence of factor-intensity reversals); here we examine formally the conditions under which reversals are present or absent. Let us begin by establishing the relationship between capital intensity and relative price of factors; for this purpose we employ the equilibrium conditions that state the equality between the value of marginal productivity of a factor and its price (this must be equal in both sectors).

Keywords: Relative Price; Commodity Price; Factor Price; Factor Endowment; Productive Diversification (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-642-37314-5_20

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DOI: 10.1007/978-3-642-37314-5_20

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