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NAFTA and Industrial Adjustment: A Specific‐Factors Model of Production
Author(s) -
THOMPSON HENRY
Publication year - 1996
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/j.1468-2257.1996.tb00893.x
Subject(s) - production (economics) , competition (biology) , economics , investment (military) , manufacturing , short run , industrial production , foreign direct investment , international economics , politics , international trade , industrial organization , business , macroeconomics , ecology , marketing , political science , law , biology
The North American Free Trade Agreement (NAFTA) will continue to attract political debate as U.S. manufacturing industries adjust in the face of increased import competition and export opportunities. This study applies the specific factors model of production to manufacturing industries in Alabama to examine the pending adjustment. As industrial prices change, there will be small output adjustments in the short run and downward pressure on the wages of production workers. Projected changes in industrial investment will lead to substantial long‐run output adjustments.