Econometrica: Jul 1955, Volume 23, Issue 3
Equality of Factor Prices in World Trade
Lionel W. McKenzieThe factor price equalization problem is approached by means of activity analysis. Conditions are determined in which the world prices of goods (alternatively, the world outputs of goods) will imply, by the profit conditions of competitive equilibrium, equal factor prices in all countries. The basic theorems are then applied to particular models of production.
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