The sufficiency of the ‘lens condition’ for factor price equalization in the case of two factors
نویسنده
چکیده
Factor price equalization (FPE) is a central theme in trade theory, for which [Dixit, A.K., Norman, V., 1980. Theory of International Trade, Cambridge University Press, London] establish the necessary and sufficient condition (the Dixit–Norman condition). [Deardorff, A.V. 1994. The possibility of factor price equalization: revisited, Journal of International Economics 36, 167–175.] provides a more intuitive condition (the lens condition) and establishes its necessity in general, as well as its sufficiency for the case of two countries. In this paper, I prove that the lens condition is sufficient for FPE in the case of two factors. This theorem has implications for empirical work. 2001 Elsevier Science B.V. All rights reserved.
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