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

14 Pages Posted: 22 Oct 2007

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.

Suggested Citation

Becker, Daniel Thomas and Gundlach, Erich, Factor Price Equality and Biased Technical Change in a Two-Cone Trade Model. Review of Development Economics, Vol. 11, No. 4, pp. 685-698, November 2007. Available at SSRN: https://ssrn.com/abstract=1023234 or http://dx.doi.org/10.1111/j.1467-9361.2007.00421.x

Erich Gundlach

University of Hamburg ( email )

Department of Economics
Von-Melle-Park 5
Hamburg, 20146
Germany
+49 40 428384589 (Phone)

HOME PAGE: http://www.erichgundlach.de

No contact information is available for Daniel Thomas Becker

Register to save articles to
your library

Register

Paper statistics

Downloads
11
Abstract Views
273
PlumX Metrics