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Factor price
About: Factor price is a research topic. Over the lifetime, 2764 publications have been published within this topic receiving 86176 citations.
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TL;DR: O'Rourke and Williamson as discussed by the authors argue that the influence of trade and factor supply changes on the spread of the Industrial Revolution from Britain can be traced to the fact that increased trade, stimulated by falling transportation costs and factor movements caused prices of locally scarce factors to fall and promoted factor price convergence.
Abstract: Much of the comparative economic history of the nineteenth century focuses on the spread of the Industrial Revolution from Britain. Incomes converged, in this view, as the transfer of superior technology raised incomes in the periphery. In Globalization and History, Kevin O'Rourke and Jeffrey Williamson challenge this technological approach, arguing that neoclassical effects of trade and factor supply changes provide more insight. Increased trade, stimulated by falling transportation costs, and factor movements caused prices of locally scarce factors to fall and promoted factor price convergence.
24 citations
TL;DR: The medieval notion of the just price was an outcome of neither an exclusively economic analysis nor a completely ethical argument, but an amalgam of some features of each as discussed by the authors, which made for a mode of reasoning about price different from the endogenousty focused price theory and limited boundaries of modern economics.
Abstract: The medieval notion of the just price was an outcome of neither an exclusively economic analysis nor a completely ethical argument, but an amalgam of some features of each. At issue is the significance the medievals attached to the concepts of price and justice and how an integrated economics and ethics made for a mode of reasoning about price different from the endogenousty focused price theory and limited boundaries of modern economics. It is argued in 'The Justice of the Just Price' that the treatment of price in medieval economic thought cannot be grasped without a comprehensive approach to its determination. The argument will first focus separately on the description of the medieval notions of price (cost of production, need, etc.) and of justice (virtue/vice) as features of the medieval concept of the just price. It proposes that, by virtue of the fact that the premises of the medieval system of analysis assumed greed as a nefarious part of human economic behaviour and presupposed the necessity of j...
24 citations
24 citations
TL;DR: In this paper, the authors show that in a world with heterogeneous financial development, the classic conclusion that trade and capital mobility are substitutes does not hold, in particular in less financially developed economies.
Abstract: The classical Heckscher-Ohlin-Mundell paradigm states that trade and capital mobility are substitutes, in the sense that trade integration reduces the incentives for capital to flow to capital-scarce countries. In this paper we show that in a world with heterogeneous financial development, the classic conclusion does not hold. In particular, in less financially developed economies (South), trade and capital mobility are complements. Within a dynamic framework, the complementarity carries over to (financial) capital flows. This interaction implies that deepening trade integration in South raises net capital inflows (or reduces net capital outflows). It also implies that, at the global level, protectionism may backfire if the goal is to rebalance capital flows, when these are already heading from South to North. Our perspective also has implications for the effects of trade integration on factor prices. In contrast to the Heckscher-Ohlin model, trade liberalization always decreases the wage-rental in South: an anti-Stolper-Samuelson result.
24 citations
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TL;DR: In this article, the authors investigate whether products in the U.S. manufacturing sector sell at a common price, or whether prices vary across producers, and they find that price dispersion is widespread throughout manufacturing and that for at least one industry, Hydraulic Cement, it is not the result of differences in product quality.
Abstract: This paper addresses the question of whether products in the U.S. Manufacturing sector sell at a single (common) price, or whether prices vary across producers. Price dispersion is interesting for at least two reasons. First, if output prices vary across producers, standard methods of using industry price deflators lead to errors in measuring real output at the industry, firm, and establishment level which may bias estimates of the production function and productivity growth. Second, price dispersion suggests product heterogeneity which, if consumers do not have identical preferences, could lead to market segmentation and price in excess of marginal cost, thus making the current (competitive) characterization of the Manufacturing sector inappropriate and invalidating many empirical studies. In the course of examining these issues, the paper develops a robust measure of price dispersion as well as new quantitative methods for testing whether observed price differences are the result of differences in product quality. Our results indicate that price dispersion is widespread throughout manufacturing and that for at least one industry, Hydraulic Cement, it is not the result of differences in product quality.
24 citations