Paths of Development and Wage Variations

21 Pages Posted: 7 Sep 2011

See all articles by Kozo Kiyota

Kozo Kiyota

Keio University - Keio Economic Observatory

Multiple version iconThere are 2 versions of this paper

Date Written: September 2011


In analyzing the relationship between factor endowments and sectoral per capita output (the paths of development), it was shown empirically that the number of cones was neither one nor three but two, and that all countries fall into one of these two cones. This is a puzzle, because it is inconsistent with large wage variations across economies. This paper attempts to solve this puzzle, introducing complete and incomplete specialization into a multiple‐cone model. Empirical results reveal that the two‐cone Heckscher–Ohlin (HO) model can be consistent with HO specialization and wage variations across economies.

Suggested Citation

Kiyota, Kozo, Paths of Development and Wage Variations (September 2011). Review of International Economics, Vol. 19, Issue 4, pp. 697-717, 2011. Available at SSRN: or

Kozo Kiyota (Contact Author)

Keio University - Keio Economic Observatory ( email )

Mita 2-15-45, Minato-ku
Tokyo, 108-8345

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