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Factor Price Equalization in a World of Many Trading Countries
Author(s) -
Kemp Murray C.
Publication year - 2006
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2006.00591.x
Subject(s) - rank (graph theory) , economics , bounded function , equalization (audio) , endowment , matrix (chemical analysis) , factor endowment , econometrics , factor (programming language) , mathematical economics , developing country , mathematics , combinatorics , statistics , computer science , economic growth , chemistry , mathematical analysis , philosophy , decoding methods , epistemology , programming language , chromatography
Conditions sufficient for factor price equalization within any non‐trivial subset of trading countries are provided. The conditions are that (a) the factor endowment ratios of countries in the subset are all bounded by the factors‐in‐use ratios in an equilibrium of the hypothetical world economy in which factors are perfectly mobile within the subset, and that (b) in dimensions higher than two, either the rank of the factors‐in‐use matrix is 2 or products do not outnumber factors and the factors‐in‐use matrix is of full rank.