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Title:Notes on factor price equality and biased technical change in a two-cone trade model PDF Logo
Authors:Becker, Daniel Thomas
Gundlach, Erich
Issue Date:2006
Series/Report no.:Kieler Arbeitspapiere 1300
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.
Subjects:Factor price equality
Economic growth
Two cone trade model
JEL:F11
O40
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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