Factor mobility and international trade

J. Peter Neary

No 199409, Working Papers from School of Economics, University College Dublin

Abstract: This paper develops a two-country model of trade and factor mobility in which capital is sector-specific but internationally mobile. The model avoids the implausible predictions of specialisation in Heckscher-Ohlin models and exhibits a rich variety of responses to exogenous shocks, including transfers, capital taxes, and tariffs. The results throw light on the relationship between goods and factor trade, reconciling the conflicting views of previous writers. It is argued that the model holds out the possibility of a new paradigm in international trade theory in which international factor movements play a central rather than a peripheral role.

Keywords: International capital mobility; International trade; Tariffs and capital taxes; Sector-specific capital; International trade--Mathematical models; Capital movements; Commercial policy (search for similar items in EconPapers)
JEL-codes: F10 F13 (search for similar items in EconPapers)
Date: 1994-06
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Citations: View citations in EconPapers (1)

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http://hdl.handle.net/10197/1754 First version, 1994 (application/pdf)

Related works:
Journal Article: Factor Mobility and International Trade (1995)
Working Paper: Factor Mobility and International Trade (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:199409

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