The New Ricardian Specific Factor Model

This paper explores the implications on trade and wage inequality of introducing financial capital or credit in standard Ricardian model production, where a given amount start-up is used to employ sector specific skilled unskilled workers following Wage Fund approach classical economists. Thus, we have Specific Factor (SF) structure Jones (1971) new (NRM) with two types labour. With an entirely different mechanism from conventional Neo-Classical structure, distributional consequences changes endowments, commodity prices, are established. Comparisons show that unlike SF model, expansion affects wages nominal costs without affecting patterns, while rise relative price skill-intensive good causes hike less than proportionately, may cause return inflate more wages. We extend basic analyse immigration, unemployment imperfect market.