Skip to main content
SpringerLink
Log in

Unequal factor prices and incomplete specialization in a Heckscher-Ohlin model of endogenous growth

  • Miscellany
  • Published:
Journal of Economics Aims and scope Submit manuscript

Abstract

Two-factors, two-goods Heckscher-Ohlin trade theory predicts that under certain circumstances factor prices equalize if countries are incompletely specialized. If at least one country is completely specialized no factor-price equalization obtains. Different factor rewards and free trade, however, are not automatically linked to complete specialization: in a Heckscher-Ohlin model of endogenous growth where the countries differ in their individual discount rates, a situation of incomplete specialization and different factor rewards will result.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Blanchard, O. J., and Fischer, S. (1989):Lectures on Macroeconomics. Cambridge, MA: MIT Press.

    Google Scholar 

  • Buiter, W. (1981): “Time Preference and International Lending and Borrowing in an Overlapping Generations Model”.Journal of Political Economy 89: 769–797.

    Google Scholar 

  • Dixit, A. K., and Norman, V. (1980):Theory of International Trade. Cambridge: Cambridge University Press.

    Google Scholar 

  • Gandolfo, G. (1986):International Economics. Berlin Heidelberg New York Tokyo: Springer.

    Google Scholar 

  • Grossman, G. M., and Helpman, E. (1991):Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press.

    Google Scholar 

  • Helpman, E. (1981): “International Trade in the Presence of Product Differentiation, Economies of Scale and Monopolistic Competition. A Chamberlin-Heckscher-Ohlin Approach”.Journal of International Economics 11: 305–340.

    Google Scholar 

  • Helpman, E., and Krugman, P. R. (1985):Market Structure and Foreign Trade. Cambridge, MA: MIT Press.

    Google Scholar 

  • Romer, P. M. (1990): “Endogenous Technological Change”.Journal of Political Economy 98: 71–102.

    Google Scholar 

  • Stiglitz, J. E. (1970): “Factor Price Equalization in a Dynamic Economy”.Journal of Political Economy 78: 456–488.

    Google Scholar 

  • Wälde, K. (1993): “Impatience, Factor Endowment and Trade Patterns in a Small Open Economy of Endogenous Growth”. Discussion Paper 97, Institute of Economics, University of Kiel.

  • Wälde, K. (1994): “Transitional Dynamics, Convergence and Capital Flows in Two-country Models of Innovation and Growth.” Discussion Paper 99, Institute of Economics, University of Kiel.

Download references

Author information

Author notes

  1. Klaus Wälde

    Present address: Institute of Economics, University of Kiel, Wilhelm-Seelig-Platz 1, D-24118, Kiel, Germany

Authors and Affiliations

    Authors
    1. Klaus Wälde
      View author publications

      You can also search for this author in PubMed Google Scholar

    Rights and permissions

    Reprints and permissions

    About this article

    Cite this article

    Wälde, K. Unequal factor prices and incomplete specialization in a Heckscher-Ohlin model of endogenous growth. Zeitschr. f. Nationalökonomie 59, 311–323 (1994). https://doi.org/10.1007/BF01227595

    Download citation

    • Received:

    • Revised:

    • Issue Date:

    • DOI: https://doi.org/10.1007/BF01227595

    Keywords

    Search

    Navigation