EconPapers    
Economics at your fingertips  
 

Were Heckscher and Ohlin Right? Putting the Factor-Price-Equalization Theorem Back into History

Kevin O'Rourke () and Jeffrey Williamson ()

No 37, NBER Historical Working Papers from National Bureau of Economic Research, Inc

Abstract: Due primarily to transport improvements, commodity prices in Britain and America tended to equalize 1870-1913. This commodity price equalization was not simply manifested by the great New World grain invasion of Europe. Rather, it can be documented for intermediate primary products and manufactures as well. Heckscher and, Ohlin, writing in 1919 and 1924, thought that these events should have contributed to factor price equalization. Based on Williamson's research reported elsewhere, Anglo-American real wages did converge over this period, and it was part of a general convergence between the Old and New World. This paper applies the venerable Heckscher-Ohlin trade model to the late 19th century Anglo-American experience and finds that they were right: at least half of the real wage convergence observed can be assigned to commodity price equalization. Furthermore, these events also had profound influences on relative land and capital scarcities. It appears that this late 19th century episode was the dramatic start of world commodity and factor market integration that is still ongoing today.

Date: 1992-06
Note: DAE
References: Add references at CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed

Published as "Late 19th Century Anglo-American Factor Price Convergence: Were Heckscherand Ohlin Right?" Journal of Economic History, vol. 54, no. 4 (December 1994): 892-916

Downloads: (external link)
http://www.nber.org/papers/h0037.pdf (application/pdf)

Related works:
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:nbr:nberhi:0037

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/h0037

Access Statistics for this paper

More papers in NBER Historical Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-12-11
Handle: RePEc:nbr:nberhi:0037